Investing in a new house is a significant decision for individuals and even families. People have to save a sizeable portion of their earnings for a very long time before they are able to buy a home and pay for related expenses. Scholars in the field, have always laid down advice on the market conditions to buy real estate, when to invest, how to structure the sale and how to select the perfect property. However, nobody ever talks about when is the right time for an individual to actually invest in a house.
Speaking on the matter Sona Gaharwar, Business Head, Tata Capital Housing Finance Limited said that income stability is one of the primary factors to consider when contemplating a decision to buy a house. “It’s very natural to make an impulsive decision when there is a sudden influx of a large sum of money in hand. However, one should consider the stability of their income before approaching a home loan. An individual should have sufficient funds in his kitty to pay down payment as well as repay successive loan installments without compromising his or her current lifestyle,” she added.
Considering your current debts and responsibilities is another important aspect when deciding to buy a new house. Unless an individual has the resources to pay the entire cost of the house upfront, he may need a loan. A loan is an added expense on the existing pile of debt. To be able to afford a house and ascertain if you are ready to take the plunge, you must review their outstanding payables. It is always prudent to have minimum outstanding debt when contemplating a decision to invest in a new home.
According to Sona, planning in advance, having a decent credit score, being ready for other ancillary expenses, a good idea of taxes and government regulations and a secured emergency fund are the other indicators that one is ready for homeownership.
Kartik Jhaveri, Manager — Wealth Management at Tanscent Consultancy said, “Though financially, these are the aspects one must look at while preparing themselves to buy a house there are also various other social and psychological factors that must be paid attention to. A desire to settle down for the long run and choice of neighborhood are some of them. Buying a house is the biggest decision of one’s life and is likely to set an individual back by quite a few lakhs of rupees, hence before sealing the coveted deal it is always wise to base your decision on reviewing the factors above.”