How to Determine Your Home Buying Budget

October 6, 2024

Before buying anything, it is common sense to check if we have the money to buy it.  Even while going to the market, we ensure we have the cash required to buy the groceries and vegetables. The same goes for buying luxury apartments in Noida. Although the quantum of capital is large, ensuring the availability of the capital is the first step. However, in this case, the process is longer and more extensive because of the quantum of capital required.

This blog discusses how one can determine the home-buying budget.

1. Evaluating Finances

The first step is evaluating your current finances. You deduct your expenses from your income to know the surplus funds available. This includes all the expenses, like your living expenses, your financial commitments, and other investments that you may be making every month. By deducting this amount from your income, you will arrive at a figure, that will give you, an idea of how much money you can spare to finance your home. If you have any savings, these will add to your budget, allowing you to arrive at a tentative figure you can invest monthly or in a lump sum to finance your property. The Internet is a blessing, as these days one can easily calculate the budget using a home budget calculator by just entering the income, expenses, savings, and other finances.

2. Budget Calculation

Using the budget calculator tool and having a clear picture of all your finances, you can now decide the total budget to buy your home. If you are taking a home loan, it becomes important to have the downpayment ready which can range from 10 to 20% of the property value. The home loan does not include the downpayment, hence it must be available when you decide to purchase, let’s say, duplex flats in Noida.

3. Home Loan

Getting a home loan is a process that involves various steps. Many financial institutions offer home loans today in the market. It is important to choose a reputed lender so that there are no complications later.  After shortlisting a few home loans, you can select a home loan that offers you a competitive interest rate and tenure, making it convenient for you to repay the home loan without facing difficulties.

The approval of the home loan depends upon the borrower’s credit history. The borrower should have a good credit rating and history so that the home loan is approved quickly. One can check the credit history on various financial apps. This facility is also available on UPI applications.

4. Other Costs

Home buying also involves additional costs like registration and stamp duty fees, legal fees, and maintenance costs. Making provisions for these expenses is a part of determining the home-buying budget. It is also wise to set aside some funds to take care of emergencies and contingencies.

One can always seek the help of financial advisors while determining the budget for their home. Choosing a reputed Builder and a safe location are important factors that directly impact the home buying budget when the project is delivered on time, managing finances, and repaying home loans becomes easier without interruptions,