Should I proceed to buy a home

[rachit_khanna]

Dear All,

I m in a great confusion , actually I want to buy a home in Delhi NCR , for this you first have to give 10% of whatever amout the home is of (this will be booking amount) , like if its 25lakh then you have to give 2.5Lakh (i.e 2.5lakh will be the booking amount).

Now I have 2lakh with me and my wife has 1 lakh so we can give the initial booking amount, but my confusion is that weather to take this risk or not because if I give 2lakha and my wife 1lakh then no hard cash will be reaming with us , and after this we have also have to pay EMI to the bank for the loan we will take it will be around 15000 to 20000 INR , so what you al say should I invest or not.

[disneysteve]

If making the down payment, or booking amount, leaves you with little to no remaining savings, then I would say that you are not yet financially ready to buy a home.

I know virtually nothing about the norms and financing in India, but here in the US we recommend a down payment of 20% of the cost of the home and also that you maintain an emergency savings fund of 3 to 6 months worth of living expenses.

[nick__45]

Don't people pay cash for house in 3rd world country? I know my relatives did every time they buy something.

[Drac]

Keep saving for some more time. I would recommend to have at least 20% of the value of the house saved before you purchase it. This doesn't mean that you have to make a down payment of 20%. If you prefer put just 10% it is OK, but keep in mind that with a 20% down payment the amount of mortgage you have to pay every month is lower and this may put a little less pressures on your monthly budget. Don't forget to have an emergency fund worth approximately 6 month of your monthly expenses. Remember that the emergency fund is only for emergencies, don't use this money for the house.