For many Indians, owning a piece of land is a dream. They put their money into a brick and mortar structure, fill it with their dreams, style it with their favorite artifacts, and turn it into the house of their dreams. Owning a home is a big commitment, but it can be quite rewarding. When you buy your own home, you gain equity in an asset that can appreciate in value over time. You also benefit from the security of not having a landlord who can refuse to renew your lease.While the road to homeownership may appear difficult, there are some simple and practical tactics that might assist you in purchasing your dream house. In this guide, we’ll look at six essential ways for making your ideal home a reality.
1. SELECTION OF THE HOUSING STOCK
Throughout the pandemic, housing supply was extremely close, which is being exploited for the benefit of dealers by filling interest and driving up home prices. Regardless of increased expenses, you may postpone purchasing a dilapidation house if you need to become a mortgage holder in 2021. Alternatively, you may need to decide on the location of your property. Make a list of critical necessities for your home and stick to it so you don’t end up agreeing to a place with many highlights you don’t like.Consider the dimensions, location, style, features, and facilities that are most important to you. Make a detailed Wishlist of your must-haves and nice-to-haves. This clarity will assist you in setting a reasonable goal and making sound judgments along the road.
2. BUDGET
When it comes to investing in your dream home, financial planning is essential. Assess your present financial circumstances, including your income, expenses, savings, and previous obligations, to determine how much you can afford. Consider down payment, closing costs, and ongoing maintenance costs. As a general rule, your monthly mortgage payment should not be more than 28-31% of your total monthly income.You should be certain that the property you are purchasing will meet your present needs while remaining within your budget. Understanding your family’s present important requirements can help you make the right decision as a home buyer.
3. Making a down payment
When purchasing a home, a down payment is a big upfront investment. Saving for it needs self-control and perseverance. To expedite your savings, cut unnecessary costs, open a dedicated savings account, and seek extra sources of income. A bigger down payment not only reduces the amount of your mortgage, but it can also result in better lending conditions and cheaper monthly payments.A usual down payment is often around 20% of the home’s buying price, though this might vary. Having a specific objective in mind will provide you with a tangible target to work toward.Small changes in your regular spending habits might pile up over time and significantly contribute to your down payment fund.Explore opportunities to earn extra income through part-time jobs, freelancing, or side gigs.Any additional earnings should be deposited into your down payment savings account.
4. CREDIT SCORE
A good credit rating is important in obtaining favourable mortgage conditions. Examine your credit report for mistakes and take actions to raise your score by paying payments on time, lowering credit card balances, and avoiding new debt. A higher credit score qualifies you for lower interest rates, which could save you thousands of dollars over the life of your mortgage.Mortgage rates recently touched their fourteenth record low, implying that they will likely remain at extremely low levels for the rest of the year.Furthermore, if it’s average, you may meet all qualifications for a home advance, but not at the shockingly cheap rates you keep hearing about.
5. INVEST AND DIVERSIFY
There are several financing options available to homebuyers, each with its own set of advantages and disadvantages. The most common is a fixed-rate mortgage, in which the interest rate remains constant throughout the loan term. Adjustable-rate mortgages, on the other hand, offer lower initial rates but come with the risk of future rate increases. Research and compare different mortgage options to find the one that best fits your financial goals and risk tolerance.Invest in a variety of asset classes, such as equities, bonds, and real estate investment trusts (REITs). Remember that investing entails risk, so you must balance possible benefits with your risk tolerance and investment horizon.
6. EQUITY BUILDING
After you’ve purchased your dream house, think about ways to increase equity quickly. Because this is a long-term aim and you have a large sum to collect, equities are the asset type that gives you the highest chance of collecting the money. This is because, in terms of long-term returns, equities have outperformed all other asset types.Equity mutual funds are now the most convenient option to invest in equities. Making bigger monthly mortgage payments is one of the most direct ways to enhance home equity; by paying more than the minimum needed amount, you reduce the principle debt faster, which improves your equity.Making extra principal payments or switching to bi-weekly mortgage payments can help you save money on interest and build equity faster.Your interest rate and monthly payments might be reduced by refinancing your mortgage. In the long run, this can also provide you with more financial flexibility.
To summarize, investing in your dream home requires financial preparation, disciplined saving, strategic borrowing, and sound investment decisions. You can get closer to your dream of homeownership by defining your goals, creating a budget, improving your credit score, examining financing possibilities, and evaluating investing techniques. Remember that the road to your ideal home will take time, but with perseverance and careful planning, you may make your dreams a reality.
