Updated: Nov 13
This is going to be a mixture of emotions of desire, excitement, comfort, relief, and pain. So make yourself ready for my experience from others that I got and some news that's going to help you with your decision to take a home loan.
Well, some people think a home loan is a debt trap, a way to lose your sleep and happiness and a stone on your heart whose weight will increase as time flows. This is kind of a tricky to answer because there are peoples around me who are actually happy to live in their own house ignoring monthly huge EMIs. If ten people sit in front of you who took home loans and if you ask about their opinions, you will get confused cause everyone have different views on it.
Debt creation should be backed up by assets, please do not depend on one income source.
This will make you financially strong and will help you during tough decisions. People think buying a flat or a plot is an asset, yes it is! Only if you have a lot of money sitting idle on your account. You can make it work for you. But if you’re buying it on loan, remember you’ve already paid double the cost of that property as an interest to the bank. Now if the actual cost you paid is lower than its current value then you can sell it on profit.
Please check out the SBI home loan interest rates in 2020;
Emotional thinking which tends to take a home loan
“Buying is an emotional decision, not a logical decision.”
People of India are emotional and why not? It is in our culture; we value our family and people here are more social than anywhere else in the world. We mind what people think about us and their reactions to our behavior and doings.
This highly influences our decisions and also helps us to push to do better and to create a good image in the eyes of people and society. Once people get settle they tend to think about the proper house and do more savings.
Who’ll want to live in a rented house after retirement?
Just imagine you are near retirement and have two children who’re at the age of getting married but still all family living in the rented house. After some time even they will try to question your life struggle what have you done in your whole life? You are not even able to buy your own house!! And believe me, it hurts a lot more than just reading this.
Well after taking home on loan, once you start living in your house that’s an amazing feeling. Monthly EMIs become a burden but if you had done a financial plan then it will not lose your sleep.
Always try to reduce your liabilities and keep outstanding dues as low as possible. If you already have other liabilities but still want to buy a house then you should take the loan at longer terms. This will reduce the EMI amount and will help you in bad situations. Otherwise, I or no one will suggest you take long term loans because this highly increases your interest amount due to compounding.
Logical thinking which cause reluctance to take home loan
Remember, a person who handles own nerves better and takes logical decisions has more chances to win.
Some people are more logical because they prefer to trust more brain than heart. You have to consider real issues before taking the home loan like your existing liabilities, expenses, savings and multiple factors that can cause you a financial burden. EMIs of your home loan should be 30 to 40 percent of the net salary. Banks also ensure this.
Banks check all your liabilities and the minimum remaining amount in the account at the end of each month. This way they try to check your financial strength. Make a financial plan mentioning the backup in case of emergencies.
Because, your dream to live in your own house should not break your dream of destination wedding or a foreign trip or admission of your child in a top college.
I know two points above may have caused you bit confusion. But I will answer this question in the best way possible.
Well, you should buy your dream house on a home loan but this should be backed up by proper planning. Try to make more earning sources and a family can work together for sake of own roof.
Don’t buy things that we don't need but want in life.
Keep away from affections to buy luxury things
Nothing will damage your status if your son going to college in public transport and you’re riding i10 to office. The roof above your head will keep you in peace at the end of each day and every morning you will go to the office happily after breakfast in your own home.
Remember, “a house has emotional value, cost of which never be measured in monetary value.” -Unknown