Planning to buy a house?
Updated: May 19, 2022
Buying a house is a big financial decision and requires financial planning. You need to be very clear on the following before you proceed to lock down such an expense:
1. What is your purpose?
- Decide what your goal for buying a house is. Is this house an investment or is it going to be your home? Your planning could shift based on your purpose.
- If you are buying a house to live in, you might look at different things such as accessibility to work or your children's’ school.
- However, if you are buying it as an investment, your concern could be the rent of the place in the upcoming years or how easy it would be to get tenants.
2. Timeline: Now or later?
Deciding on a timeline sets up the rest of your planning.
- If you want to buy a house in the near future, you might need to consider taking out a loan. Check your finances to see if you can afford the down payment and monthly instalments without burdening yourself.
- However, if your timeline is to buy a house in the distant future, then you need to start planning your savings around it. Make it a savings goal for yourself and start putting money aside every month.
3. What should your budget be?
Your budget will vary based on your purpose. Here are some tips:
- If you are buying a home, you need to decide what your requirement is. For example, do you want to get a studio apartment or a three-bedroom apartment? Research on different prices around the city since prices may vary in different areas.
- Once you have an estimate, add taxes, house registration, home repairs and home insurance costs to it.
- If you are buying a house for investment, check rental values. Ideally, the rental value needs to be higher than monthly instalments(if you have taken a loan).
When you are clear on the three points above, you can start saving accordingly. You can save for your house with an Oraan Committee.