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Indian Real Estate News : Others
Plan finances, bring down COST OF LOAN
Source: The Times of India Apr 11, 2014
This is the right time for prospective homebuyers to plan both investments and EMIs. TEAM TIMES PROPERTY writes

Come the financial year end and its time to plan finances again. Tax-saving investments, insurance policies and major purchases planned in the forthcoming financial year have to be budgeted accordingly. In most cases, a house is the most significant investment the average Indian makes in a lifetimeboth in terms of value as an investment and asset for a lifetime.

Therefore, whether as an investor or end user, you need to put in considerable planning and thought while acquiring a houseand the best time to begin planning is now. Here are three major factors prospective homebuyers need to consider:

Budget for home loan

A home loan takes away a significant portion of ones disposable income every month for a long duration. Most go in for a long-term home loan, and this means setting aside a sizable portion of the monthly income towards the EMIs.

While this seems like a fixed monthly cost, it is in fact a saving. The funds diverted towards a home loan every month should be looked at as an investment that pays rich dividends in the long term. Few asset classes yield the sort of returns property does.

A prospective home loan borrower should arrive at the maximum amount he can possibly set aside towards the EMIs. This will shorten the tenure of the home loan and bring down its interest cost.

This way, the homebuyer will be debt-free sooner and will have more time in his earning years to plan other investments like retirement planning or even another property as an investment.

Plan tax

Tax-saving investment avenues are critical in this period. If chosen well, these instruments help earn higher returns given their tax benefits. This is the right time to evaluate an investment portfolio to ensure it is taxefficient. Many instruments may not be yielding the returns expected of them because of the tax impact on their earnings.

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