Kathmandu. Making a financial plan before buying a home is like creating a blueprint for your home. A well-planned approach can help first-time homebuyers avoid financial stress and distress. For first-time home buyers, there is a 3-20-30-40 rule. Understand how it works:
Don’t buy a house that is more than 3 times your annual income: TAG_CLOSE_span_13 The value of a house should not be more than 3 times your annual income.TAG_OPEN_span_13 For example, if you earn around Rs 12 lakhs annually, consider buying a house up to Rs 36 lakh.
20-year loans: Choose a loan with a tenure of 20 years or less. You’ll pay off debt faster and save a significant amount in interest over time.
30% EMI: You should ensure that the EMI of your new home does not exceed 30% of your monthly income. If you earn Rs 1 lakh per month, then the EMI should not be more than Rs 30,000. This will help you cover the rest of your expenses.
40 percent down payment: Aim for a down payment of at least 40 percent of the cost of the home. For example, if you are planning to buy a house worth Rs 50 lakh, you should save 40% down payment. That’s Rs 20 lakh. It may take some time to save a large amount of money but it can help ease your interest burden.
Currently, there is a liquidity crunch in banks and financial institutions. You can easily get a home loan if you meet certain conditions of the bank. Home loan interest rates are also in single digits.
