After a lot of rumination, I considered buying a flat in Nandi Wood housing.
The flat will cost 40L+ which will put me under the EMI of around 45k+ according to the prevailing interest rates.
But I am in complete dilemma nowadays, whether to buy a house or not.
I came across two blog posts:-
Benefits are listed out as:-
- will save on rent
- will build an asset
- may seem higher now but as the time goes by the EMI sum % of your income will decrease
This blog is a straight mockery of the people who are buying house by taking hefty loan. Following are the arguments:-
- Paying hefty EMI every month will deprive of the much needed cash at the onset of your living
- House may not prove to be an investment - classic case of
- With the house loan you loose mobility and risk taking ability
The inference that can be drawn from these two mindsets is that it is always better to buy a house early in your career and it is also not desirable to be burdened by the heft EMI amount of the home loan.
The best case scenario is that you are in 20's and you have enough cash to completely buy the house, no loan, no EMI.
But if this is not the case then certain question arises, what is the extent until which it is financially and logically Ok to be burdened.
After hours of calculation, I derived on the generic method to determine if one is eligible to go for the loan.
If suppose your in hand income per month is X and your average maximum % expenditure for the forecast of next 2-3 years is 30% of X (assume various cases like , you getting married or having children or buying a car etc etc) then EMI should not exceed 40% - 50% of X where assuming 20-30% of X as your saving (You need to have some liquidity) . Please note that if the % expenditure is more that 30% of your in hand income then better pay attention to that.
If you are buying a house then take loan for the amount which can translate to EMI of not more than 50% of your income. You should put in the cash for the rest amount.
Well I have decided to hold my decision of buying the house.
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