BLOG

Buying a house is a major financial goal for many. Here are some key points to consider to make the process smoother and more affordable:

Saving for a Down Payment
You'll need to make an upfront down payment of 10-20% of the house's cost. To manage this, start saving monthly 2-3 years in advance. Consider investing in low-risk mutual funds like debt funds or conservative hybrid funds. The focus should be on accumulating savings with minimal risk.

EMI to Salary Ratio
Ensure your EMI (Equated Monthly Installment) doesn't exceed 40% of your monthly income. This helps you manage other financial goals and avoid excessive debt. For example, if you earn ₹100, your EMI should be ₹40 or less.

Income to House Price Ratio
Avoid overspending by sticking to the income-to-house price ratio of 4 to 6 times your annual household income. If your yearly income is ₹25 lakhs, aim for a house priced between ₹1 crore and ₹1.5 crore. This keeps your budget balanced and avoids financial strain.

Ideal Age to Buy a House
There’s no perfect age to buy a house, but consider the following factors:

- Career Stability: Ensure you have a stable job and steady income.
- Life Stage: Young professionals might focus on career growth, while those starting a family may prefer settling down.
- Market Conditions: Look for favorable real estate market conditions and low-interest rates to make a cost-effective purchase.

Most people find clarity about where to settle and have better financial stability after 10-12 years in their careers, making this a good time to consider buying a house.

In summary, plan your savings, manage your EMIs wisely, choose a house within your budget, and consider your life and career stage when buying a house.