Home loan secured, now what? Your next steps
What's the story
When Indian families start their journey of buying a home, the whole world seems to revolve around getting that home loan.
But, the reality of financial commitment doesn't stop at paying off the loan.
There are numerous other costs of owning a home that can come as a surprise to first-time homeowners.
Knowing these costs is key to budgeting effectively and preventing financial stress.
Ongoing costs
Property taxes and maintenance fees
After purchasing a house, property taxes and maintenance fees become recurring annual costs.
Property taxes, determined by location and property value, typically range from 0.5% to 2% of the market value per year.
Maintenance fees, which cover common area maintenance and amenities, can range from ₹1,500 to ₹10,000 per month, depending on the society and the facilities provided.
Utilities
Utility bills: A recurring expense
Bills for electricity, water, gas, and sewage are regular monthly expenses that vary depending on usage and tariffs.
A typical Indian household can easily spend between ₹2,000 to ₹5,000 a month just on utilities.
These costs need to be considered when budgeting for homeownership, as they generally rise over time due to tariff increases and additional usage.
Insurance
Home insurance: Protecting your investment
Getting home insurance is crucial to safeguard your property from unexpected incidents such as natural calamities or burglaries.
The premium varies based on location, coverage amount, and the policy selected, but it typically starts at ₹5 per thousand rupees of coverage per year.
Although it might appear as an extra cost at first, it offers financial peace of mind by protecting you from potential losses down the line.
Upkeep
Renovation and repair costs
Every house eventually becomes a fixer-upper, whether it's leaky faucets, chipped paint, or something more serious.
Setting aside money for repairs and renovations is a good idea. Costs can add up quickly, with minor renovations ranging from ₹50,000 to ₹2 lakh and major repairs potentially costing significantly more.
Being proactive about repair costs can make homeownership a lot smoother, saving you from financial headaches down the line.