Key indicators you are financially ready to buy a home

Buying a home is a major milestone, but how do you know if you’re truly ready? Many first-time buyers get caught up in the excitement of house hunting without fully assessing their financial preparedness. Homeownership is a long-term commitment that requires careful planning.

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✅ Step 1: Assess your financial stability

Unless you can consider buying a house cash, you are likely to need the help of a bank for financing your first home. Start off by ensuring your finances are in order:

💰 Steady Income: Do you have a stable job or a consistent source of income?

💳 Emergency Fund: Savings covering at least 3-6 months of expenses ensure you can handle unexpected costs. 

📉 Debt-to-Income Ratio: At MCB we recommend that your total monthly debt payments should ideally be below 40% of your gross income.

📌 Example: If you earn Rs. 30,000 per month, your total loan repayments (including personal loans, hire purchase, credit cards, and the potential mortgage) should not exceed Rs. 12,800.

💡 Pro Tip: Use MCB’s Home Loan Calculator to estimate your potential monthly mortgage payments and assess affordability.

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💰 Step 2: Save for a down payment

The larger your down payment, the lower your mortgage and interest costs.

🔹 Aim to save at least 10-20% of the property value. This should be on top of your emergency fund.
🔹 MCB offers various savings accounts to help you accumulate your deposit faster. 

📌 Example: For a home priced at Rs. 4 million, a 10% down payment would be Rs. 400,000.

💡 Pro Tip: Open an MCB Savings Account and set up an automatic transfer to grow your home deposit systematically.

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🏡 Step 3: Understand the true costs of homeownership

Owning a home comes with additional expenses beyond the mortgage:

✔ Property taxes (5% of property value)
✔ Real Estate Agent Fees (approx 2% of property value)
✔ Notary Fees (approx. 2% property value)
✔ Maintenance and repair costs
✔ Utility bills and service fees

📌 Example: If your monthly mortgage is Rs. 20,000, you may need an additional Rs. 5,000-10,000 for maintenance and bills.

💡 Use MCB’s Home Loan Budget Planner to factor in these costs.

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📑 Step 4: Get pre-approved for a home loan

Pre-approval gives you a clear budget and makes you a stronger buyer when negotiating with sellers.

✅ Speak to your banker about Home Loan Pre-Approval to understand how much you qualify for.
✅ Gather necessary documents: payslips, bank statements, and proof of identity.
✅ Understand loan terms and interest rates to find know the scope of your financial commitments.

💡 MCB offers competitive home loan options with flexible repayment terms.

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📌 So, are you ready to buy?

✔ Ensure financial stability and an emergency fund before committing.
✔ Save at least 10-20% for a down payment to reduce borrowing costs.
✔ Maintain a strong credit score for better loan approval chances.
✔ Plan for additional costs beyond the mortgage.

💡 Take the first step toward homeownership.

Explore MCB’s Home Loan options and get pre-approved to find out how much you can borrow. 👉 Start your journey here.