Financial planning for a salaried person to consider before buying an apartment in Hyderabad- part II

In this article, we are considering the financial constraints and related priorities of a home buyer. The article is meant for a home buyer who is a working professional, and is dependent on a salary. We shall continue our discussion on financial & related factors one needs to consider before buying an apartment.

Why should a home buyer be thinking so hard about finances? Well, buying a home means you are virtually pumping in almost a decade worth of your income into a property. It could even be as high as half the income a person earns in one’s lifetime.

Financial planning for A salaried Person to buy a home

a home buyer has to think in terms of both financial, health-related, and emotional aspects… to strike the right balance!

Family requirements, budget, and add-on costs to buying a home

[Source- Photo by Kelly L]

• If the family requirement is a bigger home, then you could choose localities that are reasonable yet well suited. For instance, the Yapral, Sainikpuri belt in North East Hyderabad is a reasonable spot with excellent social infrastructure and lots of greenery!
• Choices you make depend on family priorities: Example 1- For a budget of Rs 80 lacs, should you can buy a small 2BHK in a job hub like a Hi-Tech city area, or a 1400-1600 sft 3BHK in areas like Sainikpuri or Yapral. Option1- If family priority is to live near the area of work, then Gachibowli is a good option. Option2- If family priority is more rooms, a home in the lap of nature, and travel is not a constraint, then Sainikpuri/Yapral would make more sense
• Choices you make depend on family priorities: Example 2- For Rs 1.3 crore, you get a spacious 1600-1800 sft apartment in a Hi-Tech city area, whereas, you can own a 2500 sft, 3BHK ‘builder-floor’ in Sainikpuri‘. Option1- If family priority is to live near a Hi-Tech city, then that works well. Option2- If family priority is more rooms, and having a home ‘with one apartment per floor’ exclusive lifestyle, then an area like Sainikpuri would make more sense
• Factor in registration cost, stamp duty, service taxes, maintenance, insurance, etc. which can go up to 8% to 10% of the cost of the apartment
• Besides, you need to have a good amount of budget ranging between Rs 2 lacs to Rs 5 lacs for minimalistic interiors as well
• Plus, you need to be prepared for unexpected expenses that can crop-up anytime

2. Your credit score in CIBIL for home eligibility matters

• CIBIL has to do with your finances and determines your creditworthiness and repayment capabilities
• CIBIL is all about how good you are at repaying your debt once you take a loan
• CIBIL scores are a measure of how good you are, and how prompt you are in returning the money you borrow. It ranges from 300 to 900
• It gauges your credit tendencies, your financial habits, and your existing financial standing to determine your score. It is an indicator of your financial prudence, character, and intent over borrowed money!
• A CIBIL score of more than 700 is a good reflection that a home loan lender can trust you with their money
• With a good CIBIL score you get good bargaining power, a good (low) interest rate, a higher loan amount, and faster approval of your home loan application
• So, maintain a good credit history be it credit cards, small loans like personal loans, etc.

3. Home loan repayment tenure and likelihood of future financial stability

• Investing at a younger while opting for a home loan is better, as you have more energy left in you to safely earn the amount
• A loan application does count the earning years you have, else, you end up getting a shorter tenure and heftier EMIs while repaying your home loan
• Something only you can tell is how safe you think your future prospects are, how you are faring on health-front
• Investing time in your own wellness and health is also important. You must also invest in exercise and eating healthy so that your body and mind remain in excellent shape
• Your personal health & fitness is linked to your financial stability. You can earn for a longer duration extending beyond two decades (tenure of home-loan) only if your body, mind, and spirit are in harmony with one another!

4. Balancing finances with location and future capital-appreciation aspects

• It is prudent to know what your priorities are. For instance, If you are sure you won’t live in the apartment, then you could look at measures like locations that will appreciate in the years ahead
• So, if you are likely to sell your asset within a decade or less, then might as well invest in a place that has a greater potential for appreciation, and resale is comparatively easier
• In Hyderabad, for instance, there are many pockets where the apartment rates are right now low and are likely to appreciate more than others
• Weighing the current and potential future development of the locality in Hyderabad is important
• With an all-round development and social infrastructure growth, almost the entire Hyderabad is attractive from an investment perspective, and excellent capital-appreciation prospects

5. Legally safe apartment- RERA approved property

• Homebuyer must get a list of RERA approved properties only
• The banks won’t be offering a home loan if RERA approval is not in place
• Choose the right apartment based on your requirements and budget

With your finances, credit scores, legally-safe options, good personal health, and priorities in order, you can safely tread on the path to owning a beautiful apartment in Hyderabad.

“Money, like emotions, is something you must control to keep your life on the right track.”

– Natasha Munson

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To know more about “Home Loan For A Salaried Person: Financial Aspects Must Consider For Buying An Apartment In Hyderabad- Part I!” Click here!