Key indicators you are financially ready to buy a home

Post date

Mar 21, 2025

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.


βœ… 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:

πŸ’° Steady Income: Do you have a stable job or a consistent source of income?

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

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

πŸ“Œ 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.

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


πŸ’° Step 2: Save for a down payment

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

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

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

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


🏑 Step 3: Understand the true costs of homeownership

Owning a home comes with additional expenses beyond the mortgage:

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

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

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


πŸ“‘ 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.

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

πŸ’‘ MCB offers competitive home loan options with flexible repayment terms.


πŸ“Œ So, are you ready to buy?

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

πŸ’‘ Take the first step toward homeownership.

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