Buying a dream home is a big deal but it isn’t everything. People across all ages and groups believe their greatest achievement would be buying a home. Most of them push towards home ownership before their 30s bringing into play serious questions about buying home on single income.
In countries like India where marriage is considered a necessary social institution, co-ownership is quite common. A home can be bought on a single income for various reasons. The buyer may be single, the buyer is confident about buying a home on their income alone, the buying family has a single source of income, or they simply because they want it to be a single income property. Whatever the case, buying a home on a single income may feel daunting and intimidating to some. But with a little financial planning, owning a home with a single income is very much a possibility, even if you are buying your first home. Here are some tips to help you with it.
1. Observe and work your credit profile
When you are applying for a home loan, you must make sure to have a good credit profile. Try not to make costly purchases before applying for the loan. Reducing your credit limit would be a wise move to make.
2. Get an insurance protection plan
It is always a good idea to go for an insurance plan because In unfortunate events of unemployment, accident, or death, you and your family will need financial protection that could cover your loan. There are short and long term premium plans that offer protection from unexpected events you can choose accordingly.
3. Find a guarantor for your loan
A guarantor sign might help you to seal the deal with your home loan. But before you find a guarantor for your home loan, understand the risks involved. Once a guarantor signs for you, they are liable for your loan payment, and their loan eligibility goes down significantly.
4. Save for your down payment
In India, the government allows for a maximum of 80% loan, meaning you will have to make a 20% down payment on your home. If you aspire to buying dream home, then it would be wise to start saving early.
5. A loan from your employer
A loan from your employer for your down payment is very much possible, and an easy process at that. It is a far easier process to arrange for a down payment from your employer, considering they have the assurance of your salary.
6. Pick the perfect EMI plan
Now, this is perhaps the most important aspect to consider when you apply for a home loan on a single income. Carefully consider how much you will be able to pay for your home loan every month. If you have other sources of income apart from your monthly earnings, then consider increasing your EMI for a shorter loan duration.
Whether your home receives single or double income shouldn’t be a deciding factor on owning a home. There is a home for every income bracket, provided one educates themselves well on what would be a right fit for them. We at Anshul Group – leading real estate agents in Pune are always there to help. Reach out to us for your enquiries.