How to Plan Real Estate Finances
Repaying a real estate loan is easier, if you plan finances efficiently. If any investment is there which requires plenty of preparedness and tenacity, it is probably the real estate investment. The amount involved is huge and a great patience is necessary. It takes a minimum of 8 to 10 years for most families to feel comfortable with their property investment.
The percentage of loan amount could vary from individual to individual, but the share of loan tends to be well in the region of 70 to 80 percent. In recent times, interest rates have been highly volatile and hence, the EMI is unlikely to remain constant till the loan repayment. Here are some of the tips to help you manage your real estate finance comfortable.
Before you sign up a home loan, get mentally prepare for EMI. This will help you in managing the loan liability with lot of ease. The best option is to keep aside the EMI sum in the form of monthly savings. It will not only allow you to save a quantity for your property purchase but will also help you to be prepared when you decide to take loan.
Increase Margin Money:
Increase your margin money as early as possible. Though a real estate finance helps you in avoiding taxes, the benefit has a limit of 1.5 lakhs. If you pay a higher EMI and higher interest, it will not benefit you. Hence, keep the loan to the minimum.
Your real estate finance should be according to your repayment capabilities and the EMI should not exceed more than 50 percent of your monthly income, because you also need funds for your living expenses and emergencies.
Never borrow your loan based on your future income as it may or may not arise. Many tend to believe that their salaries would automatically rise after one year and takes their loan for 60 to 70 percent of their monthly income. It is better to have an accurate estimate for EMI for repaying the real estate finance without much strain.