Looking for a Home – Do Financial Planning First!!!
Mumbai Property Exchange is a web portal serving customers for near 15 years today. We get a lot of requirements every day and our team’s endeavor is to help clients and give them sincere advice and absolutely correct information on buying home.
75% of the buyers as we understand are clueless about property rates or the difference in the expectation is less than 30% of the market price. So if for example, the price of a 2 BHK in Malad West will say 1.20 Cr, the budgets of the home buyer will be close to 90 Lacs. This is a case which we are seeing increasingly and we are taking steps to address this and how to create more awareness in the Mumbai Property Market about pricing is our prime most Things to DO!!
Another issue which Buyers are facing today is that they are not able to do their financial planning and get to the drawing board with action.
Typically – There are 3 Ways of Buying a Home
1. Self Funding
This is by far the easiest, where one has money in various Financial Forms, like FD, Shares, Debentures, Bonds, Savings Account etc. One has to consolidate them take out the final value and get a final number as to how much amount he or she has to buy a Home – This is typically called “Budget” or how much is the total amount of money, the “Buyer” is willing to invest/pay for his New Property acquisition.
Once, you are aware of this number, keeping in mind and after provisioning for personal savings, contingency plans, education, marriage, liquidity, car buying, renovation, travel, LIC, PPF etc.
On top of this, one has to review the current and future monthly earnings, business investment if any etc.
This a usual Indian Businessman or a Corporate employee calculates on its fingertips as he knows, his whereabouts on financials very clearly.
However, it’s a big decision to draw all your income yielding financial products and invest in a Home.
However, any home buying is an equal investment and in 3 to 5 years real estate usually gives you more than a bank would give.
2. Sell and Buy
A lot of money is recycled in real estate and most of the property acquisitions are done after selling another one. Be it for Upgradation, Relocation or Capital Gains from one investment to another.
So this has to be planned well, one can start with Putting the Sale property on Sale first and finish that and then go in the market. People usually jump the Gun, start seeing houses, where the first home is still 6 – 9 months away for a sale, they go on an assumption that my Gurgaon flat will be sold in a month, which is never the case.
Ideally, one should sell the property first, have the cash in ready, have the confidence in the deal and then go for the next purchase, do online and offline homework both, but be clear to the Realtor you are dealing with about your plans. A lot of buyers we are seeing today, come in a haste, they want the cost sheets, site inspections immediately, only to realize, they are wasting their own time, as by the time they sell their existing home or property it’s going to take time. Any property transaction takes 2- 3 months minimum and if you have clarity then it’s also very easy to do a back to back deal, where you sell one home and move to another one.
3. Bank Loan Funding
This is an easy one if you are a Corporate Employee or a Business Man or even Self Employed. Banking has become very easy today, with CIBIL etc. one can do a check on their own Credit Scores, to begin with. However, to get a pre-approved loan you can get your Bank do this in a few days time.
This pre-approval is very important as this gives you the exact amount you are entitled to and also gives you a fair idea of your EMI for the next 5-10-15 or 20 years, so you can do a mental calculation of your budgets and final planning.
Thumb rule is 20-25% is required for funding of the property as your personal contribution and the rest comes from the Loan you can even take a smaller loan/Smart Home Loan etc if you are adding proceeds of another property sale.
If you are looking to buy a Home and you need financial planning, so don’t worry, just call us and within 10 minutes, we will have Clarity and Nirvana attained for you in understanding the dynamics.
Please feel free to mail us on firstname.lastname@example.org or Simply Call +919820030685