How to Plan a Budget for Buying a Flat in Kannur

When you’re thinking of buying property, one of the first and most important things to do is to plan a budget. Regardless of whether you want to buy a plot, independent house, a villa, or apartment. After all, real estate transactions involve huge sums of money, and careful consideration is critical. While there are both pros and cons of buying flats, more people prefer living in flats as they offer a lot of convenience and security as compared to independent houses.

Now the process of buying flats in Kannur itself is not complicated or difficult; you research builders, you shortlist properties, decide how many bedrooms you want in the flat, and check the location. But all of this is nowhere near as important as making a budget for your purchase.

Why Planning a Budget is Important

If you don’t plan a budget, you may end up purchasing a flat that is not really affordable for you, and face financial troubles at a later date. It is important that you know how much you can afford. In fact, if you do that right at the outset, you will find it easier to decide the other factors regarding the purchase.

If you are confused as to how to do it, don’t fret. We have some simple and effective tips for you:

Take Stock of Your Finances

List out all your incomes; include your spouse’s or parents’ incomes as well if they are willing to help you with the apartment purchase. Make another list of your liabilities, including all types of loans you may have, your monthly expenses, including groceries, fees, medicines, rent, utilities, and so on. Leave a certain sum aside for emergencies and contingencies, and that will give you the disposable income you have for a month. 

The common rule is that the budget for your home should be a maximum of thrice your annual income. So, if your annual income is 20 lakhs, ideally, your budget for flats in Kannur  should be 60 lakhs.

Track Expenses

Check whether you really need to subscribe to 6-7 OTT platforms? Are you really using that gym or swimming pool, for which you are paying a good sum each month? Likewise, check whether there are any expenses you can cut, at least for some time, so that you have more cash in your hand at the end of the month

Consider a Home Loan

Knowing your financial status will help you determine how much money you can spare; if it is not sufficient, you must consider applying for a home loan. In fact, it’s one of the most factors to consider when you’re making a budget to buy a flat.Today a number of home loan products are available and you can compare lenders, and the loan features before you finalize.

Improve your Credit Score

You need to have a credit score of at least 730 to have your home loan application approved. This is a 3-digit number that is given to you by independent credit rating agencies, after studying your financial habits, including the types of loans you have, how long you have had them, your repayment history, and so on. The higher your score, the less risky a borrower you are. Lenders will be happy to offer you loans, and may even offer favourable terms like lower interest, longer tenure, and so on.

Add an Applicant

A co-applicant on your home loan, like a spouse, sibling, parent aged under 70, or trusted friend, can be named on your home loan, allowing you to apply for a higher loan amount. Of course, you should ensure that they too have good credit scores.

Get Pre-Approved

When you get prequalified or pre-approved for a loan, your chances of loan approval can significantly improve, and even be expedited. In fact,  builders in Kannur will see you as a serious buyer and may offer you better prices. Preapproval means checking how much loan you can be eligible for before you finalize the property you are going to purchase. It is a very good indicator of how much money you will have with you for the purchase.

Check your Cash Reserves

Do you have an emergency fund, something tucked away for a rainy day? You may need to dip into it for the time being, to make the down payment or initial payment on your housing loan. The higher the amount you can pay, the lower the loan amount you need to avail. In the long run, this helps, as it means that you will pay lesser interest to the lender.

Use an EMI Calculator

EMI calculators are available online. You simply enter all the details asked for and you will get the EMI figure. All these measures will help you decide how much EMI you can pay on your home loan; once you have that, you will know what loan amount you can apply for, and depending on that, you can easily plan a budget for your flat.

Factor in All the Expenses

When you make the budget, remember that there are many other costs you will have to pay in addition to the actual cost of the flat itself. Stamp duty, registration fees, property tax, and legal fees, are the major ones. You then have to think about the cost of furnishing and decorating your flat and the monthly maintenance fees you will have to pay.

Conclusion

If you plan a budget and proceed accordingly, you can have a hassle-free purchase experience, including a smooth loan application and approval process.

 PVS Builders is one of the best builders in Kannur, and as we offer RERA registered flats, you can be sure that you don’t face any problems during or after purchase.

We have some of the most beautiful apartments in the best locations of Kannur, featuring top-notch amenities that afford you an elevated lifestyle.