How Much Money You Need to Buy a House

Summary

In this informative video, Rohan Bhardwaj discusses the financial considerations for buying a home in India. He explains the importance of having sufficient savings and eligibility for a home loan, as well as the additional costs involved in property purchase such as stamp duty and registration fees. Rohan also highlights the ideal scenario of allocating only 30% of one's income for home loan EMIs, ensuring a balance between housing expenses and other financial needs. He further explores the benefits of under-construction properties, comparing them with ready-to-move-in options, and advises on the best approach to budgeting for a home based on cash in hand, loan eligibility, and EMI affordability.

Takeaways

• 🏡 Buying a home in India requires careful financial planning and understanding of the costs involved.
• 💰 The amount of money needed for buying a home depends on the property's value and the buyer's eligibility for a loan.
• 🏦 Banks typically provide a home loan up to 80% of the property's value, with the remaining 20% being the buyer's contribution.
• 📋 Additional costs such as stamp duty, registration fees, transfer charges, and broker commissions can add up to nearly 10% of the property value.
• 💡 It's advisable to have at least 6 months of expenses saved up for emergencies and to cover monthly investments.
• 📈 The home loan's EMI should ideally not exceed 40% of the net family income, considering all current EMIs including car loans, phone loans, credit cards, etc.
• 🔢 The maximum home loan amount one can afford depends on the cash in hand, loan eligibility, and the capacity to pay the monthly EMI.
• 🏗 For under-construction properties, an upfront payment of 10-15% is required, with the balance paid to the builder by the home loan company and the final 5-10% by the buyer at possession.
• 🌟 Under-construction properties can be a good option if one can save and invest the remaining amount for 5-7 years before possession.
• 📊 The final budget for a property will depend on the combination of cash in hand, loan eligibility, and the capacity to afford the monthly EMI for all loans.
• 🚫 The logic explained in the script may not apply to Maharashtra, where under-construction properties require a minimum of 15-20% upfront payment for stamp duty and registration.

Q & A

What is the main topic of Rohan Bhardwaj's video?

The main topic of the video is discussing the financial considerations and steps involved in buying a ready-to-move-in or under-construction property in India.

What is the purpose of Rohan Bhardwaj's new channel?

The purpose of the new channel is to share powerful life skills that can help viewers achieve success in various aspects of life, including career and business.

According to the video, what percentage of the property value should one expect to contribute themselves when buying a home?

One should expect to contribute around 20% of the property value themselves, as banks typically provide a loan up to 80% of the property value.

What additional costs are associated with buying a property that are not included in the property value?

Additional costs include stamp duty, registration fees, transfer charges, broker commissions, and other miscellaneous expenses, which can total up to approximately 10% of the property value.

What is the recommended financial backup one should have before buying a property?

It is recommended to have a financial backup that covers at least 6 months of expenses and an emergency fund, as well as a backup for monthly investments.

How does the home loan EMI affect the budget for buying a property?

The home loan EMI should not exceed 40% of the net family income, which includes the combined income of all family members involved in buying the property.

What is the maximum loan amount one can get based on their monthly net income?

Banks typically offer a home loan amount up to 60 times the monthly net income, depending on eligibility.

What is the significance of having a clear budget when considering buying a property?

Having a clear budget helps determine the cash in hand, home loan eligibility, and the monthly EMI one can afford, which in turn helps in identifying suitable properties within the budget.

What is the difference in upfront payment between a ready-to-move-in property and an under-construction property?

For a ready-to-move-in property, an upfront payment of about 30% is required, whereas for an under-construction property, it's typically between 10% to 15%.

Why is it important to maintain a certain level of savings after buying a property?

Maintaining savings is important to cover ongoing expenses related to the property, such as maintenance, taxes, and potential future investments or emergencies.

What is the advice given for those who cannot find a ready-to-move-in property within their budget?

If a suitable ready-to-move-in property is not found within the budget, one can consider increasing the budget by moving towards under-construction properties.