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May 18, 2013

Never Get Entangled in Home Loan

Resmi .V.

A home is everyone's dream and it will be one of the biggest investment of an individual in his life time. In this scenario of rising property prices, it is difficult or even impossible for a person to buy a home without taking a housing loan. 

While making a final decision as to the amount of loan to be availed, a proper analysis of current financial position as well as future needs is very much crucial. Your debt obligation should never stress your family. 

As banks only provide 80% of property value as home loans, the remaining 20% should be financed by customer himself. Avoid taking loan from any other source to finance this 20%. Better find the amount of downpayment from your own savings. 

While deciding about the investment value, people usually ignore expenditure they may have to incur on the same to make it livable. You need to set aside a portion of your saving for downpayment as well as for furnishing and fittings, purchase of durables like tv, refrigerator, ac, etc. 

Next is payment of monthly EMIs. You should be in a position to meet your family expenses and other financial commitments like life insurance etc without feeling the pinch from your take home pay. 

Home loans are usually taken for 15-20 years. Your financial requirements after 10-15 years will be much different from today's life and definitely money requirement will be higher. Income will also be greater but be careful to foresee requirements on medical expenses, children education, etc. Never default your EMIs.