Missed Diwali offers? Smart financial tips for buyers planning to invest in property
Missed the festive offers this Diwali? Don’t worry, it’s never too late to plan your home purchase. Festive deals can be attractive, but buying a home should align with financial preparedness not seasonal discounts.
Rohan Jha, a 32-year-old marketing executive in Mumbai, is following a six-month roadmap to successfully buy his first home. He had planned to buy his first home during the festive season post the GST cuts, but he could not because he lacked two habits: saving automatically and keeping debt low. His savings were inconsistent because he didn’t set up an automatic transfer. Plus, having high credit card unpaid balances messed up his credit score.
To fix this, Rohan is now saving on autopilot with guaranteed automatic transfers. He’s also working hard to pay off credit card balances to improve his credit score. A clean credit report and consistent savings are now his focus.
Honestly, missing a festive offer is not the end of the world; one may argue it is a blessing in disguise. During the festive rush, we often rush into emotional decisions. If you have missed it, take the opportunity to look at your financial planning and be financially ready to buy a home.
“For example, if the EMI calculator tells you can afford the repayment at ₹60,000 a month, it may make sense to choose ₹50,000 so that there is breathing space for your other expenses. That way, when the new window comes around, say during Christmas and New Year later, you will be ready to go,” says Ashish Kukreja, founder and CEO, Homesfy, a tech-enabled brokerage company.
Start a down payment fund
“Buyers should first determine a realistic down payment target and begin saving systematically toward it,” says Rahul Purohit, co-founder and CBO, India Real Estate, Square Yards, a proptech platform. Begin accumulating substantial capital for your down payment. The primary rule is to pay yourself first. Open a new account or SIP exclusively dedicated to your home fund.
“I’ve seen many buyers who start this habit early, even at just ₹10,000 a month, and within a year or two, they have a decent down payment corpus,” says Kukreja.
Timely payments can help secure loan approval from banks
To improve your credit score, check your credit report often and fix any errors to make your credit record stronger. “Maintaining timely EMI and credit card payments boosts creditworthiness. Combining savings growth with responsible debt management positions buyers well for loan approval,” says Purohit.
Pay off high-interest loans, credit cards, and personal loans. And make sure your credit score is above 750, as that really helps. “Banks will think of you as a ‘low risk’ customer, which means lower interest rates and quicker approvals,” says Kukreja.
Affordability matters more than eligibility
Eligibility is principally judged based on income stability, credit score, and existing liabilities. “To avoid over-stretching for the maximum possible amount, buyers should run a pre-eligibility check to understand exactly how much they can realistically borrow,” says Pramod Kathuria, founder and CEO, Easiloan, a digital home loan marketplace. It is important to estimate EMIs through calculators to ensure repayment fits within the monthly income comfort zone.
Also Read: From kitchen makeovers to balcony extensions: How home renovations can reduce capital gains tax for property sellers
Just because a bank tells you that you are approved for a ₹1 crore loan, it does not mean you should accept it. Eligibility is a separate topic from affordability. According to the rule of thumb, try to keep your total EMIs (home loans, car loans, personal loans, etc.) under 40% of your monthly income. This means, with a monthly income of ₹1 lakh, your total EMIs should be no more than ₹40,000.
Keep financial safety net after buying
A large down payment is always a positive thing. It alleviates some pressure on your EMI. But don’t make the mistake of wiping out your savings account to do so. You should always keep 6 to 9 months in living expenses aside for your emergency fund. Life is unpredictable, jobs may be lost, medical needs may arise, you never know.
I’ve seen families buy a home only to be forced to sell or refinance later because they didn’t leave a financial buffer. “Keep in mind, just because you pay your registration for a property doesn’t mean the costs have ended, there is maintenance, society charges, insurance, and taxes. Add all these things when calculating your costs before thinking of approving the purchase,” says Kukreja.
Also Read: Should you prepay your home loan? Key financial considerations for borrowers
Festivals come and go but homebuying for Indians is often a matter of fulfilling a huge dream involving lifetime investment. “While festive offers may be tempting and can provide some benefits (when leveraged smartly), it’s always better to align purchase goals with financial readiness,” says Atul Monga, Co-founder and CEO, BASIC Home Loan.
The smartest homebuyers plan quietly rather than chasing market buzz.
Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics
