Buying a house is a big decision and an expensive one at that. A house is not merely an investment, it is an asset that one buys out of necessity and for daily use.

Generally, purchase of a house involves several financial considerations like loans, EMIs, down payments among other things. Often, these get confusing to decide upon.

Therefore, it could be said that one important requisite for purchasing a house is extensive financial planning, as part of which one would analyze his current income, potential future income, and other financial assets. Following are some factors of important consideration:

- It would be a feasible decision to purchase a house when one has a certain amount of savings to make the down payment, above which he may avail a bank's financing system. Banks provide loans*for up to 80% of the property value; one must be financially equipped to pay the remaining 20%

Generally, in an urban setting, one is able to accumulate a considerable 30-40% of the total cost by the age of 30-35.

- Some experts suggest that before making a purchase or starting the loan tenure, one must keep aside money for up to six months of household expenditure. This will provide some cushioning in case any financial deficits were to rise in the future.

- Another important aspect of financial planning is to list down all liabilities one has to cater to, at least for the next six months to come. This helps him calculate how much money should be reserved.

- Most people find it difficult to manage two loans simultaneously, and so, it is recommended to have all existing loans cleared before starting the home loan tenure.

* Read more about home loans here