Hello folks! Hope you are doing well in this summer season. With temperature soaring it is important that you take care of your health and try to stay indoors in the comfort of your home. Well, there is literally no place like a ‘Home Sweet Home’ and things becomes really awesome if you own it….In Indian context we call it ‘Mera Apna Ghar’. If you too are looking forward to buy a home for yourself, then you are at the right place. In this post of mine, I will be talking about the things that one needs to consider when he/she is looking for a new home.So, let’s get started.

Determining Debt-To-Income (DTI) Ratio

The most crucial thing to buy a house is Money. If you are having sufficient funds then you can buy your dream home right away otherwise you can take a loan by mortgaging your property to a lender. Lenders used Debt-to-income ratio as a tool to assert your repayment capabilities. A general rule of thumb DTI ratio of less than 36% is considered manageable.

How Much Down Payment Can You Afford?

Depending upon the financial condition and the policy of the lender, you can negotiate the down payment amount. Lenders generally finance only upto 75-90% of the total cost of the property and the rest is your down payment. But a small down payment amount will mean big loan amount which in turn will increase your equated monthly instalments (EMI).

Understanding The Housing Market

Buying a house is an expensive investment. Hence, it is important to understand the housing-market economics to ensure that your purchase makes sense from a financial perspective as well. Try to find the answer to the question that whether it is cheaper to rent than buy in the long run? If buying turns out to be less expensive than renting, then you can go ahead with purchasing.

Interest Rates of The Lenders

Interest rates play an important role in determining the size of the monthly payment that you will be paying to your lender for the mortgaged property. Depending on the prevailing economic scenario, they may be high and low in years. So, it is advised to wait if the interest rates are falling and it makes sense to make your purchase sooner if the interest rates are rising.

Considering The Lifestyle Needs

Beyond the price tag of the property in which you are investing there are host of other financial and lifestyle considerations that should be figured into your calculations as to whether you can afford to buy a house. Is extra space a requisite – New baby on the way? Do your children have to change school when you move in a new property? Do you need to cut down on your most expensive hobby or activity to make elbow room for the EMIs? Well, one should take care of all such questions.
Besides the above-mentioned points, economic outlook, time of the year, length of stay, taxes, etc., also needs to be considered when you are going to invest your hard-earned money in your dream home. EMI Calculator offered by mortgagecalculator can come in handy for you to calculate your EMIs so that you can plan accordingly.

If you have any questions/queries feel free to connect in the comments below or through my social media channels.

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