Home Buying Plan: If you want to buy a house, then first know these rules of personal finance...
What is the 50:30:20 Rule: Everyone dreams of buying their own house. Buying one's own home is an emotional issue for people because it provides mental security to people. However, given the way house prices are increasing, it is not easy to accomplish this. This is also a big financial decision for everyone. Many times people regret that they bought a house ahead of time and sometimes regret the delay. To ensure that you too do not have to face all this, it is important to assimilate the basic rules of personal finance.
So that we don't have to sacrifice many dreams-
Buying a house requires a huge amount and most people take home loans for this. A home loan is a long-term loan and its EMI is also reasonable. If you are ready to pay a large part of your income in loan installments for many years, then it is fine, but if your preparation goes wrong then this decision can prove costly. It is possible that this one dream of yours may sacrifice many dreams of your family. Let us know how to check your pocket before taking this important decision…
What does the 50:30:20 rule say?
This is the thumb rule of personal finance. 50:30:20 means that you should spend 50 percent of your in-hand salary on essential things. These include expenses like utility bills, rent, EMI, and grocery purchases. After this, 20 percent of the salary should be invested somewhere. Now keep the remaining 30 percent for other unnecessary expenses. While taking any loan, keep in mind that your EMI should not exceed 30 percent of your salary, otherwise, you may get trapped in the debt trap.
Understand all the mathematics like this-
Let us assume that your monthly earning is Rs 1 lakh. Out of this, you will have to keep Rs 50 thousand for essential expenses. With this Rs 50 thousand you will also have to pay the EMI of the house. If your salary is Rs 1 lakh, then according to the 50:30:20 rule, your total EMI should not be more than Rs 30 thousand. Rs 20 thousand will be invested somewhere, while the remaining Rs 30 thousand will be kept for other expenses. Now if you can pay EMI around Rs 30 thousand, then your home loan should not be more than Rs 35 lakh for 20 years, Rs 38 lakh for 25 years, and Rs 40 lakh for 30 years.
Manage these expenses also-
Generally, people take the help of a loan to buy a house. Banks give home loans equal to 80 to 90 percent of the price of the house. The remaining amount has to be arranged yourself. If you buy a house worth Rs 50 lakh, then you should have Rs 10 lakh for down payment. According to the income of Rs 1 lakh, it would be appropriate to take a loan up to Rs 40 lakh. If you take a loan more than this, your EMI will increase and other expenses will have to be reduced. The more down payment you make, the lower will be the EMI of your loan. It is important to keep one more thing in mind. There are other expenses involved in buying a house like stamp duty and registration charges. Avoid taking personal loans for these. Doing this work by taking a personal loan will put you under the burden of double EMI.
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