Are you planning to avail home loan to buy a new home? Or are you one of those individuals who already availed a home loan? If yes, you should have realized that the monthly EMI’s of home loans is a huge financial hole-maker from your monthly income. You should deal with the EMI legitimately to maintain a strategic distance from any bother in your financial life.
Buying or building a house is easy if you have enough money. Buyers who have no funds should definitely avail a home loan. One must take a loan based on the loan amount and the repayment capability. Calculating the EMI during the tenure of the repayment beforehand helps to manage your finances properly.
For me, when the EMI was begun for which I took a loan amount to buy a unit in the gated community villas in OMR, I planned it extremely careful. I figuratively cut down the unnecessary expenses to repay my loan. It is always better to plan the repaying of the loan amount in advance to avoid critical bitterness in your financial life. Moreover, there are a plethora of things to consider on repaying the Home Loan EMI. Some of them are illustrated below.
Plan based on the stability of your income
The predominant thing you should do is to plan safely according to your stability of income. Also when your income is increased contributes as well. So, you could decide on service heavy EMI option in case you are 100% sure about the stability of your income and job. Ensure the EMIs not to affect your regular household spending. Given that, the housing finance companies typically include 40 to 45% of your income into consideration for your monthly instalments.
Play safe with the expenditures
One important thing you should never forget is to pay your EMI within a specified time. Decide by considering all your existing and yet-to-come expenditures in mind. The regular expenditures like medical bills, kid’s school fee, and the personal and lifestyle expenses should be taken into consideration while planning for a home loan. The amount you keep aside for EMI should be left unaffected. There might come certain unwelcomed situations demand the money you saved. For that reason, always plan on saving some money for these kinds of situations as well.
Age plays a major part in repayment
Your age has a greater impact on loan’s rate of interest. Imagine you are 20 at the time of availing the loan. Then it is a possible way of playing heavy EMIs. Your monthly instalments feel less troublesome as your income is increased later on. On the other hand, this would not work if you start a loan at the age of 30. As there wouldn’t be any other major responsibilities when you are young, EMI payments are pretty much easy. But later in your 30s, it should be well-balanced with other expenses as well. There are some advantage for you, if you avail for home loan at your 50’s, as then you will not have much responsibilities.
ROI- The Rate of Interest
The ROI of your home loan will not be the same throughout the payment tenure. These days, the rate loans are not fixed preferably. The MCLR-linked home loans are rather preferred. The home loans with fixed rate are considerably high when compared with MCLR- linked home loans. The EMI amount will vary every time when the ROI changes over the period of time. So while planning the EMI, you should know the EMIs will be increased in the future. Or you might have to pay the same amount for an increased tenure.