Determining what could be afforded

Your first step in the home-buying process is to determine your budget, just as you'd likely do for any other major financial decision.

But where to start in the first place? The general rule is to look for a home that costs about 2 or 3 times your annual income. It ensures that you don’t spend too much over your expense limit and that you don’t take a large loan commitment than you can afford. A simple rule is that you should take a loan on which you can pay your EMIs comfortably along with your other living expenses. In case you are stuck somewhere feel free to get help from a financial professional who can help to get you through an appropriate breakdown, based on your individual situation.

Now that your budget is defined you need to check your cash reserves. You will need to save at least 20% of your property price as the down payment. This is the major hurdle in front of a first time home buyer. Other than this you might also want to check the other expenses for decorations, improvements, or any maintenance costs after you buy a home. Sometimes there are urgencies that can occur in anytime and need to be fixed right away.

The conclusion here is that you must be ready to tackle these surprises with financial stability without the need to deplete your contingency funds.