house_sold.jpgIf you are buying a house with money that you intend to borrow from a bank or a lending company, there are some key questions that you have to ask yourself, (and provide frank, honest answers for), before signing that bank loan agreement.

Among the questions:

  1. Will I really be able to afford this housing loan that I am making?
  2. Since this loan repayment monthly will be a major item that I will have to budget from my present monthly income, will this not affect adversely my other activities and needs, for which I will have to spend monthly and cannot do without?
  3. Is my job and income now fairly stable, and will this be true for the next several years?

This is an important exercise that you have to go through because you will have to deal with this home purchase for the next several years, since you are in effect buying this unit basically on credit to be paid on installments. Your monthly obligation to pay the bank on the loan repayment plus the interest should be well within your projected earnings and income until the time that you should have fully paid the bank loan.

If you are renting your flat now, just ensure that the new bank monthly installment payments are not very different in amount from the monthly rentals you are now paying. If this is the case, then you will not be experiencing much change in your monthly budget. But if the new bank obligation is slightly higher in amount than your rental budget before, maybe it will be prudent to look for some additional income. This may not be too difficult to do these days, with some jobs in the Internet now available even on a part time basis that you can do in your free time at home.

For major exigencies which cannot be foretold, like a job loss perhaps, it is another wise move on your part to avail of insurance plans that can answer for such types of emergency. In a credit economy like ours, insurance companies and other financial entrepreneurs always have the appropriate products to serve the particular insurance needs of the public.

Other articles of interest: