What does your friend do? Also how many years is he into the job?
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Want to buy a 2 Crore home need suggestion ?
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So, one of my friend has 80 lakhs in hand and he is looking for a home. Now he has checked many properties but due to paper issues, locations or other negative reasons it took lots of time. Now finally he has end up searching for his perfect dream home as he got a nice option but the property he is willing to buy will cost him around 2 crore including registration, broker charges etc.
Should he take a big loan of 1.2 crore and go ahead with this property ? or he should go for other reasonable option?
His earning is Rs.1.3 lakhs monthly and his is completely debt free
please give your best advice, thanks.
Term is 15 year EMI will be 117466
instead of paying EMI
invest this money in SIP even at modest 12 % it will be 5 crore 45 lakhs
Particularly ye finance ke chode( sorry for language) but it irritates me and fills me with rage, so finance ke like finance with sharan and u kuch bhi maths bhai kuch bhi.
What about property value after 15 years ?? Wo 2 crore ki hi rahegi?
What about mutual fund exit load
What about mutual fund expense ratio??
What about the LTGC tax when you sell it for buying the property ???
What the tax saving in interest and principal of home loan?
What about the rent saved if you are living in the house or the rent ehich you genereate if ypu lease it out? Easily 3-4% yield (but also taxable.
Also one thing that negates is tax saving on HRA, if you move in as own house.
Calculator pe bass number daba ke kuch bhi comment kardo, reel banado bas apne ko kya hai, junta to ... Hai...
Sip karo sip
SIP mai nahalo
Some points from me
1. Just as everybody said, bank will not give 1.2 crore loan at this salary.
2. Maximum banks in India post 75L loans give loan of only 75% of contract value
3. Though own house is good to have but as many people already told it is not a monetisable asset as you need it to live or your family need it if something happens to you, so first have the following in place
A. Term Insurance - 20 times your gross salary, that is the max which insurance companies give you and is based on logic (if required I can give that also)
B. 6 times your monthly income in liquifiable assets for emergency
C. A Health Insurance plan of at least 20 L, health costs are increasing day by day
D. A retirement fund of at least 3 times your current annual gross (including EPF, PPF, Murual funds, etc), basically illiquid assets...
4. One can start with lower value house and sell it later to buy a bigger one (I sold my 80L house this year after being debt free last year and bought a new one)
Bought a bigger one in better area for around 2Cr with a debt of 1.2 CR... but I am covered in all points and have income much higher than your friend... also, I am covered for my 2 kids education as well....
All this is based on my experience and being a Finance guy from one of top B Schools in country, I was able to plan my personal finance well...
Final suggestion
Don't go with what world is doing, build assets but start as per your income... living in rented accommodation is not bad (I lived for about a decade in rented acco)....
Real estate is berserk nowadays.
Don't buy.
Better live on rent, take a plot/farm and invest rest, plan holiday.
Moving steadily is the best way.
2 cr house is everybodys dream.
Recently a relative took home and realized below:
Interiors are huge sunk cost. Thus, if there is an option to buy one with interiors already done by previous owner which looks good to you, it might be better option.
Out of reach by miles. Go for 75 lakhs flat and 10L for furnishing.
If still not happy, go for 1Cr flat with 35L loan.
@the . OP , Is this 2cr flat fully furnished? If not add another 25-30 lakhs towards furnishing it properly . And around 8-10k each month towards monthly maintenance charges .
Just asking for opinions from others as I don't live in a metro city . How do these expensive flats' prices appreciate over time in Cities like Mumbai Hyderabad and Bangalore? In my place, even though it's a capital city , the value appreciation is not that good as there is so much vacant land where more and more new flats can be built . So obviously people will go for a new flat instead of an old one . My plan is to buy a vacant land and to build an independent house instead . Land prices do appreciate fast here as well .
but main thing is my location is nearby office area. tcs office is just 1 km from my house and my office is 2km. that's why the price has increased so much. but it will not increase in this way in the future. in 10 years it may not even double (9 cr .)
I will give you a very helpful suggestions with the given statements it will quadraplevyour investment but fir that my fees is 500 rs I too have bought property recently hope you would reply
So what I am getting here is, if you still want to pay rent to a property you already own, buy a flat!
just a joke. Don't come at me.
Anyways after 60 i cant use swimming pool , gym , football ground etc.
LOL, lagta hai India me tumhra friend he housing crisis start karne wala hai. 😬
You know better which one is best for you, don't know what is going to happen in next minute.
if you want to buy then buy now don't think too much, there is no guarantee for money.
I would suggest to go for loan till 20-30 lakh which he can complete within 10 years.
OP. That friend is you. People don't write their own name to ensure privacy.
He should take a home of ₹70l-1cr and forget about dream home.
He should pay 50% of the amount and take rest as loan. He will get a low interest loan by investing rest of the money.
Now, he should invest rest of the money in different mutual funds. He should keep around 75% allocation in index funds and 25% allocation in small cap.
After 2-3 years, everytime
he can book some profit and pay that money as pre-payment, note that this amount will directly be deducted on the principal amount, it will help to decrease the loan tenure significantly. He can do this exercise for first 10-12 years, later no need of doing that as interest component will be low already.
It is stupid to go materialistic and buy something which you don't have.
Considering current income, his loan won't be approved for a 2 crore House with 70-80l down payment. If he gets an approval then it will become a huge financial burden on everyone in the family.
Yes if his wife earns the same then there is no issue with emi close to 1Lkh
If he has ancestral properties of min 5-6cr and if family is assuring to support you in future then he you can think of spending up to 1.5-2cr. Else a big no no.
I would suggest you to diversify your investment rather than putting everything in one place.
let's assume tomorrow you would need a few lakhs for kids education or for some medical expenses, then you would be forced to sell the entire property though you need only a few lakhs. Instead if you had invested in a 70lakh flat and rest on lands in the outskirts of the city, then you can look to sell one of these at the time of financial distress.
Note: Do not take loans and invest in lands. It doesn't make sense as you will be paying interest, tax and appreciation will not be compensating these.
bhai, even someone making 2-3L per month after tax might not take that kind of pricey property.
compromise is a universal truth, tell him that he can't check all his boxes, or maybe ask him to switch to much higher package 😉
Location ?
My Honest opinion.
It is not just about buying the house but also investing your 80 lacs, which if made FD will depreciate more than inflation and lose value in some years.
Remember the golden formula 50-50 rule, that means if you have 80 lacs max you should go for a house worth 1.60 crores.
Buy something in that budget and better still buy a ready flat. If under construction than reputed builder and anyway you will not need loan for construction linked plan.
You will have the below advantages -
- you will have your own house
- rent will be saved
- your 80 lacs are safely invested or parked
- tax benefits both principal and interest saving tax on 2 + 1.5 = 3.5 lacs - saving tax of 1.2 lac a year or 10K/month
- future is secured as houses are getting out of reach in cities and rents are also getting higher
I would not recommend taking such high loan unless you have other long term saving which you can tap in in worst case scenario of job loss etc. Not to mention you may end up paying interests to bank alone in tune of 2 cr plus . Emi would be also around 1 lakh per month for a 30 year loan.
Also what if you change your job = commute time change ?
By the grace of bholebaba and one good habit of mine, I can live a much more peaceful and controlled life than most of my friends. That one habit is to live life debt-free. I have never taken any loans to date and with the grace of bholebaba will continue this habit till death.
In any case, you have to take a loan than take it only when it's a life-death situation otherwise refrain from taking loan.
I still remember in 2017 when I was looking for an apartment in my city I finalised two properties one was around 1.25Cr and another was 0.75 Cr. My dream property and most loved one was 1.25Cr but I just had 0.85Cr in my pocket which means I had to take a loan of 40 Lacs to get that dream property. As I am totally against taking loans till it is life and death situation I settled with the second property of 75Lacs.
Today it has been 7 years in this flat and believe me I am more than happy in this flat due to low monthly maintenance and easily accessible market and public travel.
As its well said by someone: Jab tumhare mann ka ho toh accha par jab tumhare mann ka na ho toh aur bhi accha kyoki woh bhagwan ke mann ka hota hai.
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Assuming it's metero city looking at the valuation.
It all comes down to,
1. Cash left after Emi
2. Monthly expenses
3. Occasional travel/dinning etc
4. Marriage/child educational expenses
5. Potential salary hikes/income hikes
6. Dependent old age parents
1.2Cr is huge amount since emi has to be paid every month till 25-30 years, he should be very cautious. Selling and buying is very tough job, it becomes harder to sell high value properties as people who can afford reduces significantly.
Also the property appreciation maybe equal to the interest paid on loan(my own estimates).
If the property is earning some rentals along with stay, then it would be ok.
I suggestion: if he buys the home ask him to take a term insurance (of not already have one) covering the ~1.5Xloan amount, it will make sure the loved descendents will not be in trouble.
from recent personal experience, i would not suggest someone to spend their entire savings and again taking huge loan for house and be in debt for significant time. i know it is everyone's dream to own a dream house but in today's market it is a trap.
ps: no offence to anyone.. but just an honest real life review
I would suggest to buy property ranging from 80 lakh to 1 cr. taking 1 cr loan will put huge pressure on a salaried person. I myself bought a flat for 2 cr.(had to buy high value property to reduce capital gain on property sales). Its present value is 4cr+ as it is 2kms from my office and is located in prime location. but for me my property value is zero as I live in it. It will be an asset to my future generation when they sell this.