Housing and Space Management

Housing And Space Management 3(2+1)

Lesson 29: Cost Of Home Ownership

Guidelines For Assessing Affordability

• The value of the plot should not be more than one-fifth of the total of the property. It is mere waste to own an expensive house on a cheap plot and similarly an inexpensive one on a valuable plot.
• A family should be able to pay at least twenty per cent of the value of the house in cash, as beginning equity. More the cash payment in the beginning less the interest has to be paid against the loan. If possible, the term of loan should run no longer than 15 to 20 years.
• A wise purchaser keeps provision of two to four per cent of the purchase price to initiate the purchase. These changes are for arranging the loan, title examination, legal task for registration, etc.
• Investment made on household furnishing is the highest in the early stage as compared to other stages.
• In case of small and medium income approximately 25 per cent of the cost of the home is recommended for furnishings.