BudgetTo Purchase A House
By rubyroy
@rubyroy (824)
India
September 3, 2012 3:08am CST
We all have a desire for shelter.The question is how much to spend for your shelter.We have to have the right type of budget that will help you to buy a decent home.It should not be an extravagant one that will land you in debt,but one that provide you a decent house with the required amenities.I would never like to spent 60% of my salary on home loan and furnishing. This will put me in financial hot waters when my income get downsized due to inflation or business failure. To build a home with comforts,you should always have to save first to buy a plot, and at least have 20percent of the total cost of construction as ready cash in your hand,then you can acquire a loan for the rest of the amount.When taking a loan you should always keep in mind that monthly repayment should stay within 50percent of your total income.When you plan like this,in the event of a crisis where there is a reduction in your earnings, you will still be able to repay the loan amount.Always ensure that the loan amount is calculated on reducing balance method,so that your liability will decrease as years pass.Never take a loan on the maximum limit of your income and face difficulties in the event of a reversal of fortune. Make a hedge fund for repayment of loan by investing in bonds and securities that will help you tide over the repayment of loans in the event of ill health or accident.So when you make a budget ensure that you have enough cash balance to meet your expense and savings after repayment of your loan amount.
5 responses
@randylovesdar (4932)
• United States
24 Sep 12
When Randy and I decide to buy this trailer (we can buy it in five years) we are hoping that we do not have to take out a big loan. The trailer park owner will do the financing for us and most of our rent money will go towards the purchase. Here we can take out a five year loan or a 10 year loan. I think we might take a 5 year loan. I do not see how people can spend 50 percent of their income on housing alone. I currently do not have any credit cards which is great.
1 person likes this
@berting600 (3453)
• Philippines
3 Sep 12
That depends on your planning and abilities to make your own home.My house must be made up of durable supplies so that it could last more years.You must also consult an
expert what date is appropriate to start making your dream house.
@berting600 (3453)
• Philippines
4 Sep 12
A loan is what most like to avail but I am already obsessed to have one.I better have
my own savings to make my house to avoid huge interest to a loan.
@TeamCholent (2832)
• United States
26 Nov 12
The way financial advisers in the US suggest you should be putting down roughly 20% of the purchase price(this excludes closing costs and paper work filing fees which can amount to an additional $5,000-$20,000). On top of this you need to spend 30% of your income on your mortgage at the most to ensure you can survive and of course any additional savings you might have would be a great thing. Too many people out there rush into buying a house and then realize they can't afford it and have to give it up.
@mrswhitfield (2044)
• Indonesia
9 Sep 12
Having a dream house is a dream of everyone. I also have the same dream, a comfortable house after working hard for years in which I could live for the rest of my life. The main problem in having a house is how much money we have. Buying a fix house or building a new house together require substantial funds. I agree with what you say, do not take out a loan that is too large for your salaries because someday it would turn our finances with big problems.
@keithdv (9)
• Philippines
3 Sep 12
Its everybody's dream to own a house in which we can call it home. Working hard is just one key to aim that dream. I always say to myself that when I am able to have a savings good enough then my first priority would be a house. I agree that it shouldn't be as big as possible. Comfortable, a little spacious and decent is okay. Maybe if i have the kind of a very good job, then i can think also of loans. Thanks for the tips regarding purchasing a house rubyroy. Loans would be a second option for this.
