Buying a new home in India? How do you know when you are ready?

You want to move out of that rented place and buy your own home because you can see the advantages of owning your own property. You want to build equity and secure the future, get a tax break and have something to call your own. But how do you know that you are ready to buy your own home? Here is a self check list you need to run:

1) Do I have a steady source of income? Have I been regularly employed for the last 2 to 3 years? Is my source of income reliable and credible?

2) Do I have a good past record of paying my credit card bills, other EMIs and payments? Remember that each loan provider will check your CIBIL report and any discrepancy is likely to show up there and obstruct a smooth home loan sanction!

3) Do I have a few long term debts like a car loan or a personal loan? If your repayment of these have been good, you are more likely to get that home finance sanctioned.

4) Do I have money saved for a down payment, registration and other extra charges? These will, as a thumb rule work out to be about 30 percent of the total home value. So, if you are planning on buying a home worth INR 20 lacs, you should have INR 6 lacs ready with you to go ahead. Banks and home loan institutions will only offer 80 percent finance maximum depending on your repayment capability.

5) Finally, do I have the ability to pay the home loan EMI every month, plus the other costs that come associated with owning a home?

If your answer to all the above questions is a yes, its great news. You are ready to buy your home now. Happy house hunting!