Amit and Neha are a perfect love story. They met in a college and it was love at first sight. The college years went by dreaming about their life together, getting married and having their dream home. They used to spend hours imagining how they would decorate their sweet home. After completing their studies and starting their careers, they decided to take the plunge and get married. As their parents happily agreed, the next step was to own a dream home. But they realised that having their dream home was not easy. All these years they dreamed about house but never did the homework of buying a house. They consulted a financial planner who guided them about buying a new home.
First and foremost is to look at the savings that has been made to buy the house. Since they were both salaried pooling of their savings could help them to set aside higher sum for initial payment of the house. Besides this, they looked at the options of borrowing from parents and friends who could lend them for a short duration. They figured out that they will have to save for at least two years before they could decide to buy a house.
The monthly savings also gave them an idea of how much share of their income can go toward payment of home loan. Ideally a share of around 25% of combined income would ensure that there is enough balance to take care of their monthly expense. Based on the prevailing interest rates and longer-term loan of 20 years could help them to know the amount of loan they could avail to buy a house. The financial expert can guide them to regarding the loan procedure like selecting the housing loan company, type of interest rate (fix or float), Interest subsidy under government schemes.
Based on the loan amount, the value of the house can be arrived and then selected based on their budget. Since the New regulations like Real estate regulation Act has protected the rights of buyers they could go for under-construction property that could be ready in couple of years. Here the selection of developer with good track record and flexible payment plan can help them to pay later as the project gets completed. This could give them time and resources to get married as well time to do more savings as their incomes increase. Once the property has been shortlisted completing the paper work will be the next important task which takes time as well as resources.
The journey from dream home to owning it in reality sounds arduous, but the joy of stepping in your own house with your beloved is immeasurable. This not only requires to dream from your heart but adequate financial planning to make it happen.