Sanjeev Nanda
Planning to Buy a Home
Evaluate the Costs:
In order to understand the financial nuances of buying a home, there are a number of things that we need to understand; for eg knowing the various types of costs involved in the home buying process:
- down payment
- closing costs like registration & stamp duty
- equated monthly instalments (EMIs) for home load repayment
- renovation expenses
- insurance
- property tax
- maintenance
- operating expenses
Cost fact sheet:
- types of costs as stated above
- higher interest costs due to time over-runs, additional charges by builders and new taxes by the government constitute the hidden costs
- to cover hidden costs, provide for about 25 percent of the cost of a built up area for a ready to occupy home and more than 40 percent for a home under construction
- for meeting home acquisition costs, especially for down payment, save in systematic investment plans (SIP) of balanced and debt funds, besides recurring deposits (RD), depending on your risk appetite and the timing of your home purchase
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