Should You Continue To Live On Rent?
Living on rent for years, you now plan to buy an apartment of your own? You have been told that having a property of your own adds to your financial stability and also, says a lot about your social standing. But, before you fall prey to terms like financial stability and social standing, do a reality check. MakaaniQ tells you five signs that tell you to continue to rent rather than buying a property.
A new job
Switched job recently? Even if you are being paid handsomely, you will have to wait for at least two years. Lenders have criteria when giving out a home loan that includes how stable you are in your career. An unstable employment history can be a cause of warning bells for the lenders. Hence, if you have switched your job, wait before you buy a home, stay on rent instead.
Savings still not there
Buying a home requires you to pay at least 20 per cent of the property cost as down payment. This is only possible if you have been saving your hard earned money. In case your savings are not enough to make the down payment and still have some for other expenses, then wait. Stay on rent until you have enough savings that could help you buy the property of your choice.
Paying hefty bills
Too many bills -- credit card, car loan, home maintenance, electricity and personal loan? You should wait before you buy. Clear yourself from all the small financial liabilities that take up a large percentage of your monthly salary. These payments are seen as a part of your income-to-debt ratio that matters to the lender when giving you a home loan. Existing EMIs can call for a rejected loan.
Are you ready?
With a home of your own come expenses that become a constant. Property maintenance, décor, parking charges, and other repairs would require you to keep a certain percentage of your monthly income aside. On the other hand, a rented property is your landlord's prerogative and so is its maintenance Moreover, if you invest in a property away from your workplace because it is affordable, think of the travel expenses. Staying on rent, for now, would be viable as you could move to a locality closer to your workplace, helping you save on the travel expenses.
You want to choose your investment avenues
Are you buying a property as an investment and plan to sell it in near future to earn returns? Did you know a large part of property appreciation is due to inflation? Hence, the rise is equal to the price you paid when you bought the property. Hence, you have only spent on the property. In case investment is your plan, look at for avenues where you can invest small but earn big in the long-run, example plots.