Buying a house of your own or staying on rent. This is a common question that comes in mind of most people eventually (assuming they are still staying on rent).
Most people in young generation who have recently started earning are living on rent. They plan to buy a house of their own someday when their finances are better. And that is a rationale thought.
There will always be social pressure to buy a house as early as possible. Then there is another common reasoning that says that when someone is already paying the rent, why shouldn’t they purchase a house on loan and pay EMI instead. Atleast they will get to own an asset.
All this is true. But buying a house is not a small thing. It means decade(s) long commitment and ability to repay the loan, month after month. So you need to be sure that you are financially prepared if you want to purchase a house.
First thing to arrange is the down payment. Do you have atleast 20% of the cost of the house with you? That is the minimum required downpayment? If no, then lenders will not give you the loan.
Next comes your geographical stability. What will you do if you need to change cities after sometime? That would once again mean staying on rent in new city and also paying EMIs. That will be a double hit for you.
Also, you need to be ready to pay EMIs for several years without fail. If your current job is not stable and you don’t foresee a very reliable income in near future, it can be disastrous to take a large loan and then default later on.
Buying a home is a big and satisfying decision. But you should be prepared for it. Renting still makes financial sense if your finances are strained currently. So think about it and do what you think is right and not what society wants you to do. After all, you will be paying the loan EMIs and not society.