Financial Planning For Buying A House In 2024 (Expert’s Advice)

A 9.2% growth rate is to be expected in the Indian real estate market between 2023-2028 year. This signifies that today is the right time to buy a house. Worried about the financial aspect? Don’t Need To. Get 5 effective advice & 3 necessary precautions for financial planning for buying a house.

Why Right Financial Planning For Buying A House Is A Must?

64% of the population in India was seeking to buy a house in India in 2020. And in the next year, it reached 82%.

If you are also one of them then you are at the right place now. Because inappropriate financial planning for buying a house in India may make you regret it in the future.

If you feel like you have already missed the opportunity then you need to know this fact:

“Between 2023-2028, the Indian real estate market is 

expected to have a (CAGR) growth rate of 9.2% as per the report”

However, the real estate industry has already hinted with the dramatic changes in the past few years. 

Eco-friendly development, gated communities, landscape planning, addition of facilities, tax benefits, lower mortgage rates, etc. are some of the latest developments in the real estate sector.

So, now is the right time to buy a house with the best financial planning to effortlessly manage the necessary factors.

5 Advice For Financial Planning For Buying A House

Considering the affordable options, doing complete research, knowing your home loan eligibility, ways to save money, other costs, etc. are a few of the advice for financial planning to buy a house.

• Affordability: What Is Your Budget?

Begin your financial planning for buying a house in India by considering how much you are able to afford.

To know that you need to sort out the following factors:

• Income

Consider your monthly income at first.

• Expenses

List out your monthly expenses like housing, transportation, food, debt, etc.

• Savings

Check the money you have saved for down payments & unexpected expenses.

• Clarification

By understanding all the above factors, you can easily calculate the amount to afford for spending on a home.

• 30% Thumb Rule

Try not to spend more than 30% of your monthly income on the housing costs like property taxes, EMI, homeowners insurance, etc.

• Research: Start Searching The House

Over knowing your affordability, you can start researching the latest housing market. Begin with considering the prices of houses in other cities & states, and analyze the trend there.

While doing so, don’t miss out on the location, size & features of the house because these are the factors that mostly influence the price appreciation in the future.

• Financial Support: Know The Home Loan Eligibility

Once you find a house that is similar to your preferences then it’s time for you to know your eligibility for a home loan.

If you are a salaried individual or in the past few months or years, you are banking with a selective bank then there is a chance of being pre-approved for a home loan.

Typically, this lets you know the money you can possibly borrow & what is the monthly payment structure. And this will make your house-buying process effortless. 

• Savings: Through Monthly Down Payment

Once you are planning for buying a house through a home loan then finding a possibility of saving through a down payment is a must.

“Higher your down payment amount, lower the monthly EMI would be.” 

If you can save a small amount of money each month then it will reach an appreciable amount in the future.

Out of multiple ways of saving a down payment, you can opt for creating a fixed deposit account, initiating a recurring deposit monthly & short-term fund investment.

• Costs: Other Than Buying A House

Other than the house purchasing amount, there are multiple other costs included such as home insurance, property taxes & maintenance. 

So, it is necessary to consider the following costs in the budget.

Tips: For The Middle-Class Group Of India

Being under a middle-class section of people, you have to strategically plan the financial & practical aspects of buying a house in India. 

To help you with this, we have listed the tips below to help you buy a desired home.

• Choose Tier 2 & Tier 3 cities because the cost of living is comparatively lower here. You can also able to buy a large home for your estimated money.
• Choose a house that is currently in good condition. It shouldn’t require multiple repair works. This helps to save money in the future.
• Prefer buying a house that has a smaller land plot. Because it will help you to save property tax & maintenance costs.
• Buy a house where you want to live in for a longer period.
• Buying a house is one of the best ways of building wealth & security.

3 Precautions: Don’t Miss Out On This

• Always Search For Grade A Developer

Choose Grade A developers – Why? This makes you rest assured that the house you planning to buy is legal & it is constructed to achieve the highest quality standards.

Grade A developers in India have access to selective expertise & they always prefer to collaborate with the best ones in the industry.

The developer also offers a better customer experience, information at the fingertips, helps through loans & registrations, etc.

• Don’t Ignore Your Preference For House

Make sure that you don’t underestimate your preferences in the search for affordability.

Buying a house is a kind of long-term investment, so choosing the right one with consideration of all your preferences & affordability is a must.

Real estate market is so diverse, so not even finding a house that doesn’t match your preferences is impossible.

So, try to explore the latest real estate trends across the states in India. For ex. start with properties in Mumbai, Bangalore, Chennai, etc. because the following states have shown a better price appreciation YoY.

• Don’t Be Too Hurry To Buy A House

With a multitude of housing options available, finding the right one can be daunting. However, rushing into a decision often leads to subpar living conditions due to a lack of consideration. 

To ensure a quality home purchase, take time to research reputable developers and maintain a checklist of essential features. This includes outdoor space for children to play and desirable amenities.

FAQs