For most of us, buying a house is that one dream that everyone wants to check off their list. But, half of them are tired of dreaming of creating their space but not completing it. It is because of the financial responsibility and discipline that is essential to realizing our aim of buying a house into reality. To help you reach your goal of having your own house, we have compiled the top tips as suggested by the experts before you set out to avail SBI Maxgain Home Loan.
1) Pay off your existing debts
When you want to buy a new property, this is where you should start. To achieve your goals that too buying a house which is considered a huge investment, it is imperative that you pay off all of your current debts. Consider and adopt little steps that can be taken to pay off loans and other financial obligations.
For instance, if you have a car that you purchased with a loan from a financial institution, it is recommended that you pay off that loan before applying for a new home loan to fulfill your wish to purchase your dream home.
2) Put money aside for a deposit
The down payment for a home must come from your own resources. This can range from 10% to 25% of the market value of the property. The down payment of SBI maxgain home loan or any other bank will be between Rs 6 lakh and Rs 15 lakh if a 2BHK apartment costs about Rs 60 lakh. You need to put a down payment when you are availing SBI maxgain home loan scheme or any other suitable scheme, along with checking home loan interest rates all Banks 2022.. For the same, start accumulating money for the down payment as soon as you consider buying a home. If required, minimize your standard of living to save that will allow you to purchase a new home and realize your ambition quickly. Save your money by taking this action, and then deposit it as soon as it’s due for the down payment on a new home.
3) Open a bank account to start saving for your dream house
Owning your ideal home is costly, and you need a sizable sum of money to purchase the property before you can call it your own. Therefore, you will need to secure part of the savings and set aside to purchase your new property. To achieve the same, you can simply open a new bank account specifically for deposits toward your dream house. Put a portion of your first paycheck into this account so you may start saving for a down payment on a house. Try to put any additional funds, such as bonuses or salary increases, into your home savings account, along with checking home loan interest rates all Banks 2022.
4) Find alternative sources of income
A person’s dream home is something they work hard and spend a lot of money on. You must therefore put in more effort to ensure that you can pay for everything. In order to obtain the needed finances for your new home, you can therefore look for alternative income sources in addition to your current salary. Yes, it is difficult. However, one should put in a lot of effort to secure their future and acquire their ideal home. So, finding other sources of income is merely another way to save before you avail SBI maxgain home loan.
5) Maintain a high credit rating
A high credit score is necessary to purchase your dream home. This helps to keep your focus on factors that will improve your credit score. Start utilizing a credit card that requires monthly payments if you don’t currently use credit. Make it a habit to pay off all of your credit cards at the end of the month and keep the cycle going. This way, you can fetch a lower interest rate as compared to the average home loan interest rates all Banks 2022.
6) Follow Your Budget
Which category of your credit takes up the main expenses-housing, entertainment, dining out, and shopping? Analyze your spending pattern. Create a budget by classifying your expenses and figuring out how you’re spending your money. You don’t specifically have to carry out these takes physically. There are several apps available to assist you in creating a budget. You can keep track of your spending and compare your income to your expenses and, at the same time, check home loan interest rates all Banks 2022. If you now dine out 10 times per month, for instance, reduce that number to 5 or 6 to save money. Similar to this, instead of purchasing “branded” groceries for home cooking, think about switching to “house brands” or generic varieties that may be less expensive.
7) Save, but also invest.
It might not be enough to just save your extra money in a savings account. Think about investing in it as well. For example, the maximum interest you can receive on a savings account is 4% annually. You can earn interest on a fixed deposit (FD) account starting at 6% per year before taxes. You can earn interest in recurring deposit (RD) accounts starting at 7%-8% p.a. before taxes. In contrast, depending on the fund, certain mutual fund investments might yield between 10% and 15% (or even more). FDs and RDs are risk-free investments as they don’t get affected much by the changes in the market. Mutual funds can outperform inflation despite their risk and reliance on market conditions.
8) Prepare for Additional Expenses
In addition to the down payment, there are additional out-of-pocket expenses that you also need to save for. For instance, stamp duty (between 5% and 7% of the property’s value), registration fees (at least 1%), fees for the memorandum of title deed (0.1% of the loan amount), interior design, power connection, water supply, etc. In addition, there are brokerage fees, legal costs, home insurance, etc. Even though it could be challenging to correctly account for all non-loan fees, strive to have at least an estimate so that you can plan your course of action (your EMI savings, discussed in the last point, will be of great help).
9) Compare home loans
In addition to conducting research on the type of home you want to purchase, compare home loans on independent websites to narrow down your alternatives. If you choose a floating rate loan, interest rates start at 8%+ p.a. and are often indexed to the bank’s MCLR (Marginal Cost of Funds Based Lending Rate). Fixed interest rates begin at 9%+ per annum. Processing fees (0.25% to 1% of the loan amount), pre-closing costs (up to 5% on fixed-rate loans), and late payment penalties are other factors to take into account. You can estimate the true cost of borrowing by comparing every component, such as home loan interest rates all Banks 2022 of a home loan package.
These tips will enable you to build the house of your dreams. To obtain your ideal home, you must be dedicated and determined in each of the aforementioned ways.