I have gained lots of knowledge about RE from this forum. I don’t post a lot but reads all posts :).

I am getting a deal in Tirupati Campus for ready possession 2 BR flat. As there is no Completion certificate, I have to pay 2.75% service tax on agreement value. I have to stretch my budget for this flat and EMI would be 40% of our (me n my husband's) take home salary + almost all savings will dry-up. the only factor pushing us for this deal is the availability of the same type of flat after 2 years. As we know rates will be stable till there are no signs of huge salary increments. We want to own a flat in Vishantwadi area as its closer from our workplaces + has some good schools nearby (my husband's company just 3 kms from here). We are ready to take resale (0-5 yrs old) flat. We have seen some resale flats in this area, problem is, there are very few societies in this area. Mostly are like standalone buildings. So most flats we don’t like and the flats which we like owners are quoting like anything, seems not interested in selling.
So If I do not stretch my budget I think I will lose the flat of my choice, and if I stretch I know I have to compromise in my expenses.

Can you help me in solving my dilemma?
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  • My 2cents based on on personal experience:

    If you have money that you can use for down payment, I would suggest that go for minimal loan amount. Make max possible down payment (builder may give some lower psf rate also)

    With Home loan over long tenure, you will end up much more than the current cost of the flat.
    Also go for pre-payment of the loan (say every quarter).
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  • Originally Posted by Dipti
    Can anyone what would be home loan interest rates after this base rate hikes by RBI?

    That we have to see only after this month. As of now the deposit rates have been increased by 25-75 bps points, so consider atleast 0.5-0.75% hike. There are teaser rates as well, but you need to study in depth for hidden things associated with it.

    For home loan, either go with Axis Bank in private or Bank Of Baroda in PSU. Avoid ICICI at all costs.
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  • SBI home loan is also good, they just a friend offered 8 % fixed for 1st yr, 9% fixed for 2nd, and then floating.
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  • Originally Posted by realacres
    That we have to see only after this month. As of now the deposit rates have been increased by 25-75 bps points, so consider atleast 0.5-0.75% hike. There are teaser rates as well, but you need to study in depth for hidden things associated with it.

    For home loan, either go with Axis Bank in private or Bank Of Baroda in PSU. Avoid ICICI at all costs.


    Thanks Real. Yes I am considering BOB or Union Bank as a option for home loan big NO NO NO to ICICI. I am considering that home loan rates will be back to 2007-2008 levels before recession i.e. 10% for PSU banks. I have done EMI calculations considering 10% interest rate and then its going at 40% of take home salary.
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  • Go for It

    Hi,

    Taking into consideration, your exhaustion from home search.

    Your personal choice which is changeable,

    Taking ur salary as one unit (HUF).

    40 % out go is sufficient to go for that flat.

    Even SBI will provide u loan with these figures.

    Now managing finances is ur collective headache.

    Cut down on expenditures - Trips to Kirti restaurant and other

    eating joints there. Smoking, other unnecessary expenses.

    Now inflation is not going to go more than this ( Int rate hikes),

    and ur salary will be up due increments, while PSU Home loan will

    more or less stay same. Calculate for 12 % int rates.

    U have safety parachutes so also for rainy day.

    Pay out any other loan out standing rather than home loan.

    The prices r going to be stable or upwards as Dhanori develops

    and comes fully in Pune alongwith Lohegaon.

    Another advice try Pratik Nagar, Kasturba Society and Kumar

    Sammruddhi. Also go for multi bldg society only, which u have

    already chosen.

    PS: After loan think one of u have lost ur salary for mind peace.
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  • Are you serious or sarcastic?

    Originally Posted by Sansei
    Hi,

    Taking into consideration, your exhaustion from home search.

    Your personal choice which is changeable,

    Taking ur salary as one unit (HUF).

    40 % out go is sufficient to go for that flat.

    Even SBI will provide u loan with these figures.

    Now managing finances is ur collective headache.

    Cut down on expenditures - Trips to Kirti restaurant and other

    eating joints there. Smoking, other unnecessary expenses.

    Now inflation is not going to go more than this ( Int rate hikes),

    and ur salary will be up due increments, while PSU Home loan will

    more or less stay same. Calculate for 12 % int rates.

    U have safety parachutes so also for rainy day.

    Pay out any other loan out standing rather than home loan.

    The prices r going to be stable or upwards as Dhanori develops

    and comes fully in Pune alongwith Lohegaon.

    Another advice try Pratik Nagar, Kasturba Society and Kumar

    Sammruddhi. Also go for multi bldg society only, which u have

    already chosen.

    PS: After loan think one of u have lost ur salary for mind peace.
    CommentQuote
  • Originally Posted by Dipti
    Thanks Real. Yes I am considering BOB or Union Bank as a option for home loan big NO NO NO to ICICI. I am considering that home loan rates will be back to 2007-2008 levels before recession i.e. 10% for PSU banks. I have done EMI calculations considering 10% interest rate and then its going at 40% of take home salary.


    EMI being 40% of take home salary is Ok. You are the best judge of your financials. Consider below factors while doing your calculations:

    - Are you sure that your combined income is going to be the same? i.e. any one of you have no plans to take a break in next 15-20 yrs.
    - Do you have some emegancy cash left after making a down payment?
    - Plans for your children's education (if you already have) or plans to have children (if you do not have right now)
    - Do a calculation of your current monthly expenses against income and check if you can cut them down to afford this EMI? Do not keep aside the one time expenses like health insurance, personal insurance, taxes etc.
    - While projecting your financials, also consider society maintenance and property taxes too.

    Best of luck. :)
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  • Hi,

    Well if you have inherited funds then my suggestion would be to take loan from that fund. Consider that as a best investment of your inherited fund, which might be just lying in the bank without earning good interest. You will be getting 9 to 12 percent rate of interest (which of course you will be paying to the bank from which you take this loan). Just keep on paying EMIs to your inherited funds bank account.

    That would be the best scenario unless your inherited funds are earning you a better or same kind of returns.

    Thanks,
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  • Originally Posted by Sansei
    Hi,

    Taking into consideration, your exhaustion from home search.

    Your personal choice which is changeable,

    Taking ur salary as one unit (HUF).

    40 % out go is sufficient to go for that flat.

    Even SBI will provide u loan with these figures.

    Now managing finances is ur collective headache.

    Cut down on expenditures - Trips to Kirti restaurant and other

    eating joints there. Smoking, other unnecessary expenses.

    Now inflation is not going to go more than this ( Int rate hikes),

    and ur salary will be up due increments, while PSU Home loan will

    more or less stay same. Calculate for 12 % int rates.

    U have safety parachutes so also for rainy day.

    Pay out any other loan out standing rather than home loan.

    The prices r going to be stable or upwards as Dhanori develops

    and comes fully in Pune alongwith Lohegaon.

    Another advice try Pratik Nagar, Kasturba Society and Kumar

    Sammruddhi. Also go for multi bldg society only, which u have

    already chosen.

    PS: After loan think one of u have lost ur salary for mind peace.



    I had seens resale flat in Kumar Sammruddhi owner was quoting 35L for 950 sq. ft flat. So left that one. I will check for other mentioned societies with local broker.

    This home loan would be the first loan we are taking, no other loan taken.
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  • Dipti,

    To cut long story short, just ask this question to yourself:-

    Can you maintain the current lifestyle even after buying your house? If yes, go ahead, if not, you need to take second call.
    Just make sure you think on long horizon...seen cases where first time home buyers take loan as if they are taking car loan. While taking home loan, longer horizon needs to be seen & if you can afford a pre-closure in initial stages, then increase EMI & reduce tenure.

    * If your current expenses are like pubs, discos, smoking etc. then better to cut these first, good for savings as well as health :)
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  • r u interested in uttam townscapes ? a friend is going there to negotiate rate over the weekend. You could potentially get 28-2900 and fit in your budget.
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  • Originally Posted by realacres
    Dipti,

    To cut long story short, just ask this question to yourself:-

    Can you maintain the current lifestyle even after buying your house? If yes, go ahead, if not, you need to take second call.
    Just make sure you think on long horizon...seen cases where first time home buyers take loan as if they are taking car loan. While taking home loan, longer horizon needs to be seen & if you can afford a pre-closure in initial stages, then increase EMI & reduce tenure.

    * If your current expenses are like pubs, discos, smoking etc. then better to cut these first, good for savings as well as health :)


    Yeh Real,
    Even after going for this much loan amount we can maintain our current lifestyle. Ours lifestyle is simple indian lifestyle. No pubs, disco, smoking, drinking, no late night weekend parties.

    Regarding loan tenture, yes currently we are DINK couple, so if we go for this deal will be paying more EMI initially. As well we are taking into consideration increase in home loan rates during this tenture and doing calculations taking avg interest rate as 12%.

    Thanks real, all members for all your suggestions, really appriciate your help. We are still evaluating our options, lets see.
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  • Originally Posted by rendezvous
    r u interested in uttam townscapes ? a friend is going there to negotiate rate over the weekend. You could potentially get 28-2900 and fit in your budget.


    Sorry rendezvous,
    We are not interested in Uttam Townscapes.
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  • Dipti,

    You said that the project is ready poss but the builder hasn't received the OC as yet. Then why not book today & make the agreement once OC is received by the builder? This way you can save ST of 2.575%. Ofcourse, the duration between booking & agreement should not be more than a month.
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  • Originally Posted by Dipti
    I am getting a deal in Tirupati Campus for ready possession 2 BR flat. As there is no Completion certificate, I have to pay 2.75% service tax on agreement value. I have to stretch my budget for this flat and EMI would be 40% of our (me n my husband's) take home salary + almost all savings will dry-up. the only factor pushing us for this deal is the availability of the same type of flat after 2 years. As we know rates will be stable till there are no signs of huge salary increments. We want to own a flat in Vishantwadi area as its closer from our workplaces + has some good schools nearby (my husband's company just 3 kms from here). We are ready to take resale (0-5 yrs old) flat. We have seen some resale flats in this area, problem is, there are very few societies in this area. Mostly are like standalone buildings. So most flats we don’t like and the flats which we like owners are quoting like anything, seems not interested in selling.
    So If I do not stretch my budget I think I will lose the flat of my choice, and if I stretch I know I have to compromise in my expenses.

    Can you help me in solving my dilemma?


    I find your reasoning for buying this house lame. Since you are open for re-sales why are you ruling out the possibility of getting a re-sale flat in Tirupati Campus itself 2 yrs down the line?

    Regarding financial I would let you decide on your own.

    Just keep the below points in mind.

    1) Prices are almost back to the peak of 2008 and are struggling to rise further, indicating these prices are highest to what Pune can digest.

    2) Builders are still doing all kinds of frauds/cheating, no law to punish them. Since you are buying ready posession this is taken care of, but not 100%. Unless society is formed and sales deed is in place, builder risks are not over yet.

    3) Typically I would buy where I can put 50% down and loan for the rest amount, and still have some cash in hand for unplanned emergencies. Since you are exhausting all your savings keep in mind that once you have EMI over head, building up savings again is very difficult. If it took you 5 yrs to build current saving, After loan it will take you ~10 yrs to build the same kind of savings, considering inflation even more yrs.

    4) I presume you have kids and you are aware of kind of expenses kids have.

    Do not get desperate to buy home, unless all the bells whistle in your heart, do not buy. This is the one of the biggest purchase one does in life, so do not take even 1% chance of some thing that might be bothering you.

    Good luck to you.
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