Home loan
Planning to buy a house. I'm confused about what should be the max price range I should be targeting for. I was okay with going till 2 cr since I would be able to do 40% down-payment and take loan for 15 years whose monthly EMI wouldn't be more than 1/3rd of my monthly in hand salary. But after talking to few folks, realized that people are actually okay going for costlier properties. People who bought house in last 3-4 years, what % down-payment did you do and what % of your in hand salary is your EMI?
1/3rd is subjective, base it according to your expenses and goals.
Also interest rates currently are quite high, it might be better taking a shorter term loan (<= 10y).
Also, also, do not purchase an "under construction" "possession soon" project. Builders are absolute scum. Do full research before committing. Get a feel of the area as well by renting for a year or so.
Since interest rates are high currently, expecting it to go down in next few years. That's why taking a long term loan with floating interest rate.
Aren't under construction projects bit cheaper?
Yes I'm only going for renowned builders.
What rates are you getting out of curiosity?
Cheaper, yes. Uncertain, absolutely. Better opt for a ready to move if you wish to live there. Prestige will upsell their under-construction matchbox apartment in Varthur of all places for 2cr, and folks will buy it without even stepping a foot in the area.
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Anise Nadeen
Stealth
a year ago
I guess you will get an awesome house in 2cr .
Think about a long term prospects too.
Dezi Carmden
Stealth
a year ago
Don’t want to scare you but What if you lose the job?
If you do a down payment of 40% , that might leave you with lesser liquidity.
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I registered my new property in Jan for 2.5cr. 80% of it was financed and my EMI was around 50% of my monthly take home. Key points you should keep in mind.
1. If you are buying for yourself, focus on what will give you happiness. It is ok to pay more for a location of your preference, or for the brand value of the builder, or for extra sqft. No property is perfect so be very clear about what you are getting and what you are willing to compromise. After all, you will end up with this choice for a long time
2. I quit my job 6m in, so things were hard. I had spoken to a financial planner who was strictly against me buying. He gave me an example of an Amazon executive who lost his job but had EMI commitments h couldn’t meet. Long story short - life is unpredictable and make sure you can plan for all eventualities, however remote. You need to have your emergencies sorted, and give your self time to come back into the game
3. Interest rates don’t matter as much since they will get corrected very fast. Focus on pre payment within a timeframe of 6-9 years or lesser.
30% of your net income as EMIs sounds fine but be aware that this 40% should be including any other EMIs you have today or you may be taking on in recent years. Of course your salary will likely increase in further as well but plan accordingly.
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