September 3, 2012 3:32 pm
I am planning to purchase plot and construct house on a loan.
How to evaluate the Home loan I can afford and Risk I can take?
Pls somebody suggest.
in that case , better choose to buy only residential plot with your savings ,if you can and keep living in rented residence. generally the land is appreciating asset, whereas the construction is depreciating ,and what you would pay as rent would mostly be the finance cost and the depreciation cost , and not any gain /loss. one way, renting could be a better alternative in early young age, when you have enough strength, zeal for transferring the residential every year or two. when you accumulate enough money for down payment for comfortable loan a/m, you can plan building a house on your plot. by the time you may have enough idea about your job security etc. one has to compromise for his circumstances every time. your finance plan should give you sound sleep, and not otherwise!
Dear Raju, at any given point of time the total EMI outgo for all your loans taken together should not be more than 40% of your net mly income. For example, if your NMI is 50000 Rs. your EMI for all loans say Home, Car, Personal,…., should not be more than 20000 Rs. in total.
My concern is about the No. of Years for Home loan, as no. of years is more , I can reduce my EMI, but need bear lot of interest and sustaining source of income (As I work for a Pvt MNC) for same no.of years.
As of now, my job is stable..But, what if something happens…
How to take care of this kind of situation, can be a big debt trap ???
Dear Raju, if you are not sure of your future earnings, renting is advisable. Regarding the early payment of home loan, it’s possible by keeping your loan requirement low which can be repaid in next 7-10 years.
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