How to build a home without home loan
Today we are going to talk about how to build a home without home loan. Many a times people will go and take loans for 11 percent or 12 percent and they fall into a debt trap and face a frustration. The cost of house may be 50 lakhs and the loan availed may 20 or 25 lakhs and they end up facing legal complications.
Going forward the next generation at least can think about buying a home without home loan. Most of the times when we talk to people they say that they will be able to build a house with their salary and will be able to take loan for majority of their income. One always know that at a start of career buying a home is a plan but one can always consider living with family for a certain period of time or may be rent a house for a certain period.First they can save their income for the 5 years to 10 years and then from the returns on this savings they can build a home. So in order to dream buying a home this method will help you to carry forward your dream of building a house.
For example if you are taking a housing loan of 50 lakhs for 20 years, your approximate EMI will turn out to be Rs.35,000 and with an interest portion and other charges you will end up paying 90 lakhs over 20 years. Now if you consider loan tenure of 10 years, your EMI will be approximately Rs.55000 and you will end up paying 65 lakhs in total. And if you sell your house above Rs.65 lakhs then only you will be selling more than what you have bought for. So as soon as you get the idea of buying a home, you will calculate the EMI you can pay for towards loan. Instead of that why dont you consider investing Rs.25,000 as a SIP. You can think of it in many ways, if you are young you may invest directly into equity based SIP or else invest into an aggressive stocks and them monitor and review it appropriately. If you invest Rs.25,000 into equity SIP for 10 years it will be around Rs.30 lakhs and with 10 % compounding it will grow to Rs.45 lakhs and if you fetch a 12% it will grow to Rs.50 lakhs and if your investment fetches 15% the total fund will grow to 55 lakhs. So once you get the idea of buying a home, understand the portion of EMI you are ready to pay and consider investing it towards SIP and pay your SIP like an EMI. Once you accumulate the funds as above, you can go ahead and buy a new dream home. So if you say that the accumulate amount may not be enough considering inflation etc then you can increase your SIP amount and save accordingly. Or you can consider apportioning your annual hike into your savings.
Hence if you go by the above method of accumulating savings towards SIP, you will never have to take a home loan for buying your dream home. You can rent a house and plan like this and there is no mistake in doing this. So here is wishing you a way to financial freedom and plan your purchase of dream home through this method.
Happy buying!
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