i have started earning since 1997 without going for a house but started saving from 1999. at the present condition, is my decision wise by not opting for a house/flat and going for saving in post office schemes, ppf,nsc etc? If i gained how much and if i lost something, how much i lost?
RE:home loans
by JM on Apr 14, 2007 11:02 PM Permalink
It is not a good decision nicegem. You have saved money and you think you are rich but considering inflation and considering you will NEED a house at some point, it is not the right decision.
As Jagadeeshan rightly said, go for a flat but dont stretch your budget. It is better to buy 2 small flats as your first buy rather than buy one big one now. This will give you flexibility which you need as a first-time home buyer.
Stop thinking about being rich and saving money (like our fathers and grandfathers did) and start thinking about being wealthy. Since you are just 10 years into your career, Im assuming you are in your early 30s and still have about 10 years to take calculated financial risks. You have your 40s when you can be get conservative and diversify your portfolio to NSC etc.
RE:home loans
by Jagadeesan R on Apr 14, 2007 09:09 PM Permalink
No you should still go for a flat. Just limit your budget according to your earnings. If needed, go for a 7/8 year old flat. Your EMI should not be more than 30% of your net monthly income...Also your plan should be pay off the loan in 6/7 years, by making some periodic bulk pre-payments etc...even if the initial term is 15 year or 20 years...This way, you can maximize your savings on income tax and also ensure that you dont fall into debt trap. Future interest rates are likely to be maximum 11-12 percent ( we are almost at that point now )...
Flat being an investment, is a need in the long-term...If you make some sacrifices now, you can build an asset for the future,..
Post Office, NSC tax exemptions will slowly be phased out over 4/5 years..Also now way we can continue to get good interest rates on these..
