Should I buy a property with a loan at 30 with a 85,000 salary?

Ans: It sounds like you've been diligently managing your finances and investing in property, which is a significant accomplishment. Let's take a closer look at your situation and explore potential strategies to optimize your financial position.

Assessing Your Current Investment: Property Ownership
Owning a property valued at 90 lakhs, which you purchased eight years ago for 60 lakhs, indicates a healthy appreciation in value over time. Property can be a valuable asset that offers potential long-term growth and stability.

Evaluating Financial Commitments: Mortgage and Monthly Expenses
With an EMI of 43k per month for another 20 years, it's essential to ensure that this obligation fits comfortably within your budget. Considering your combined monthly income of 1,10,000 and expenses of 35k, it seems like you're managing your finances responsibly.

Considering Future Financial Goals
As a family with one child, planning for the future is crucial. It's commendable that you're proactively assessing your investment decisions to ensure financial security and growth.

Exploring Alternative Investment Opportunities
While property investment can be lucrative, diversifying your portfolio with other assets may provide additional benefits. Consider exploring investment options such as mutual funds, stocks, or retirement accounts to supplement your existing holdings.

Consulting with a Certified Financial Planner
Given your financial goals and current assets, consulting with a Certified Financial Planner (CFP) can provide valuable insights and personalized recommendations. A CFP can help you assess your risk tolerance, identify investment opportunities, and create a comprehensive financial plan tailored to your needs.

Conclusion
Overall, your investment in property has proven to be a wise decision, considering the appreciation in value over time. However, exploring alternative investment avenues and seeking professional financial advice can further enhance your financial well-being and help you achieve your long-term goals.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: You've built a strong financial foundation with your savings and investments. This is impressive, considering your current financial obligations and future goals. Let's take a detailed look at your situation and assess whether you should buy the property now or wait.

You earn Rs 1.13 lakhs monthly, and have substantial investments:

Rs 28 lakhs in mutual funds.
Rs 10 lakhs in PPF.
Rs 26 lakhs in EPF.
Rs 25 lakhs in gold.
Rs 20 lakhs in LIC.
Rs 2 lakhs in FD.
You also invest Rs 60,000 per month in various saving schemes.

Monthly EMI and Financial Stability
Purchasing a property worth Rs 1.30 crore will require a significant monthly EMI. If we assume an EMI of Rs 75,000 for 30 years, let's evaluate if this fits into your current financial structure.

Income and Expenses:
Your monthly income is Rs 1.13 lakhs. Deducting Rs 75,000 for EMI, you’ll have Rs 38,000 left for other expenses and investments.

Understanding Your Expenses
Your current monthly investments total Rs 60,000. After accounting for the EMI, it’s essential to ensure your remaining income covers your living expenses, savings, and unexpected costs.

Emergency Fund
An emergency fund is vital. Ideally, you should have 6-12 months of expenses saved. With Rs 2 lakhs in FD, consider increasing this fund to cover unforeseen expenses. This ensures financial stability without disrupting your EMI payments.

Assessing Investment Allocation
Mutual Funds:
You have Rs 28 lakhs in mutual funds. Mutual funds are versatile and offer potential growth. Ensure your portfolio is diversified across equity, debt, and hybrid funds to balance risk and return.

PPF and EPF:
Your PPF and EPF balances are Rs 10 lakhs and Rs 26 lakhs respectively. These are safe, long-term investments providing assured returns. They are also excellent for retirement planning.

Gold:
Gold worth Rs 25 lakhs adds stability and acts as a hedge against inflation. However, its returns are generally lower compared to other investment options.

LIC:
With Rs 20 lakhs in LIC policies, evaluate the performance and returns. If these are investment-cum-insurance policies, consider surrendering and reinvesting the amount in mutual funds for better growth.

FD:
Your Rs 2 lakhs in FD is a good start for an emergency fund. Ensure you have sufficient liquidity for emergencies.

Cash Flow and Loan Eligibility
Given your current financial commitments, paying a Rs 75,000 EMI might strain your cash flow. It's crucial to maintain a balance between your loan repayments and daily living expenses.

Impact on Lifestyle
Evaluate how a high EMI impacts your lifestyle. You must comfortably manage your expenses, investments, and future needs without financial stress.

Benefits of Waiting
Waiting to buy the property can provide several benefits:

Increased Savings: Allow more time to save, reducing loan amount and interest paid.
Market Conditions: Property prices may stabilize or fall, offering better deals.
Financial Cushion: Build a stronger financial cushion, reducing the burden of EMI.
Power of Compounding in Mutual Funds
Investing consistently in mutual funds harnesses the power of compounding. Over time, even small investments can grow significantly. This can enhance your financial stability and provide substantial returns.

Diversification and Risk Management
Diversifying your investments across different mutual funds reduces risk. Balancing between equity, debt, and hybrid funds helps manage market volatility and provides steady returns.

Mutual Fund Categories
Equity Funds: High risk, high reward. Suitable for long-term growth.
Debt Funds: Lower risk, stable returns. Ideal for short to medium-term goals.
Hybrid Funds: Mix of equity and debt. Balanced risk and return.

Advantages of Mutual Funds
Professional Management: Managed by experts, providing better growth opportunities.
Liquidity: Easy to buy and sell, offering flexibility.
Diversification: Reduces risk by investing in a variety of assets.
Tax Benefits: Certain funds offer tax advantages under sections like 80C.
Potential Risks
Market Volatility: Equity funds are subject to market fluctuations.
Credit Risk: Debt funds carry the risk of issuer default.
Interest Rate Risk: Affects bond prices and, consequently, debt funds.
Reassessing LIC Policies
Evaluate your LIC policies. If they are investment-cum-insurance, consider surrendering them. The amount can be reinvested in mutual funds for better returns and flexibility.

Future Goals and Planning
Your financial planning should align with future goals like your daughter’s education and marriage. Ensure your investments are structured to meet these goals without straining your current finances.

Creating a Balanced Portfolio
Your portfolio should balance risk and reward. A mix of equity, debt, and hybrid funds provides growth and stability. Regularly review and adjust your portfolio to align with your goals and market conditions.

Certified Financial Planner
Engage with a Certified Financial Planner to tailor a financial strategy. They provide personalized advice, ensuring your investments align with your goals and risk tolerance.

Final Insights
Buying a property is a significant decision. Evaluate your financial stability, future goals, and current commitments before proceeding. Ensure you maintain a balance between loan repayments and living expenses. Waiting might provide better financial security and opportunities.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Buying the Property: Assessing Your Options
You are considering purchasing a flat priced between Rs 18-22 lakh. You have Rs 11 lakh maturing soon and Rs 1.5-2 lakh in PF balance. You also have gold worth Rs 10 lakh. You are contemplating whether to take a home loan of Rs 10-12 lakh or use your savings and assets.

Evaluating the Home Loan Option
Pros of Taking a Home Loan:

Liquidity: You maintain liquidity by not using all your savings.
Tax Benefits: Home loans offer tax benefits under Sections 80C and 24(b).
SIP Continuation: You can continue your SIPs, growing your investments over time.
Cons of Taking a Home Loan:

EMI Burden: Monthly EMIs can strain your take-home salary of Rs 39,500.
Interest Cost: You pay interest on the loan, increasing the total cost of the property.
Financial Stress: Managing EMIs and other expenses might be challenging.
Evaluating Using Savings and Assets
Pros of Using Savings and Assets:

Debt-Free: No loan means no EMI burden.
Interest Savings: You save on interest costs.
Financial Freedom: No monthly EMI, allowing better cash flow management.
Cons of Using Savings and Assets:

Reduced Liquidity: Using all savings and assets reduces your emergency fund.
No SIPs: Stopping SIPs might impact long-term wealth creation.
No Tax Benefits: You miss out on home loan tax benefits.
Analyzing Monthly Cash Flow
Your take-home salary is Rs 39,500. Let's analyze the cash flow for both options:

With Home Loan:

EMI (Assumed): Rs 10,000 (approx)
SIP (10% of EMI): Rs 1,000
Total Outflow: Rs 11,000
Remaining cash for expenses and savings: Rs 28,500

Without Home Loan:

Gold Purchase: Rs 15,000 per month
No EMI: Rs 0
SIP Continuation: Assuming Rs 1,000 (for continuity)
Remaining cash for expenses and savings: Rs 23,500

Considering the Future
Children's Education: Your daughters are 19 and 14. Higher education costs might rise soon. Ensure you have funds for their education.
Emergency Fund: Maintain an emergency fund for unforeseen expenses.
Retirement Planning: Continue to invest for your retirement.
Professional Insights and Recommendations
Balanced Approach: Consider a mix of both options. Use part of your savings and take a smaller home loan. This keeps some liquidity while reducing loan burden.
Prioritize SIPs: Ensure you continue your SIPs. SIPs are crucial for long-term wealth creation.
Gold Investment: Buying gold every month can diversify your portfolio. However, consider market fluctuations.
Emergency Fund: Always maintain an emergency fund. Avoid exhausting all savings on the property.
Tax Benefits: Utilize home loan tax benefits if you opt for a loan. It can reduce your taxable income.
Final Insights
Buying a property is a significant decision. Evaluate all aspects before proceeding. Consider both immediate and future financial needs. Balancing liquidity, tax benefits, and long-term investments is key. Make a decision that aligns with your financial goals and stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Assessing Your Current Financial Situation
Income and Expenses
You and your spouse earn around Rs 1.6 lakhs per month.

Your total expenses are Rs 1.3 lakhs per month.

This includes rent, insurance, basic expenses, and mutual fund investments.

Savings and Investments
You are investing Rs 21,000 per month in mutual funds.

Your current savings stand at Rs 20 lakhs.

Home Purchase Consideration
You want to buy a home in Noida worth Rs 65 lakhs.

You plan to take a home loan of Rs 50 lakhs for 20 years.

Financial Stability and Decision-Making
It's crucial to understand the impact of this decision on your financial stability.

Buying a home is a significant financial commitment.

Evaluating the Home Loan Option
Loan Details
A home loan of Rs 50 lakhs for 20 years.

Monthly EMI will depend on the interest rate.

EMI Impact on Monthly Budget
Calculate the EMI to understand its impact on your monthly budget.

Ensure the EMI fits within your budget without straining finances.

Comparing Renting vs. Buying
Currently, you pay Rs 18,000 per month in rent.

Compare this with the expected EMI.

Buying a home may offer long-term benefits.

Pros and Cons of Buying a Home Now
Advantages of Buying Now
Fixed Asset
Owning a home provides a sense of security.

It's a long-term investment for your family.

Appreciation Potential
Property values in Noida may appreciate over time.

This can be beneficial for your investment.

Personalization
You can customize your own home to your liking.

This adds to your comfort and satisfaction.

Disadvantages of Buying Now
Financial Strain
A large EMI could strain your monthly budget.

Ensure you can manage all expenses comfortably.

Opportunity Cost
Using savings for a down payment may reduce your liquidity.

Consider the impact on your emergency fund.

Interest Burden
Home loans come with interest payments.

This adds to the total cost of the property.

Alternative Investment Options
Increasing Mutual Fund Investments
Consider increasing your mutual fund investments.

This can help build a larger corpus over time.

Power of Compounding
Mutual funds benefit from compounding returns.

The longer you invest, the more your money grows.

Risk Diversification
Diversify your investments across different mutual fund categories.

This reduces risk and enhances returns.

Regular Funds vs. Direct Funds
Benefits of Regular Funds
Investing through an MFD with CFP credentials provides professional guidance.

Regular funds offer advisory support.

Drawbacks of Direct Funds
Direct funds require more active management.

You may miss out on expert advice and insights.

Assessing the Timing
Market Conditions
Consider the current real estate market conditions in Noida.

Buying during a favorable market can be advantageous.

Personal Financial Goals
Align your home purchase with your long-term financial goals.

Ensure it doesn't compromise other important financial objectives.

Future Income Prospects
Evaluate your future income prospects.

A stable or increasing income can support your loan repayment.

Final Insights
Comprehensive Financial Plan
Create a comprehensive financial plan.

Include your home purchase, investments, and savings goals.

Emergency Fund
Maintain a robust emergency fund.

Ensure you have 6-12 months of expenses saved.

Professional Guidance
Consult a Certified Financial Planner (CFP).

Get personalized advice tailored to your financial situation.

Balanced Approach
Balance your home loan with other financial commitments.

Ensure a comfortable lifestyle without financial stress.

Regular Review
Regularly review your financial plan.

Adjust it based on changes in income, expenses, and goals.

Long-Term Perspective
Keep a long-term perspective.

Consider the overall impact of your financial decisions on your future.

Conclusion
Buying a home is a significant decision.

Assess all factors carefully.

Ensure it aligns with your financial goals and stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are already doing a lot right.
Managing a home loan, caring for your mother, and still saving Rs 22,000 monthly is strong.

Let’s now take a full 360-degree view of your finances.
This way, we can see if taking a property loan is good or if increasing savings is better.

We’ll review your income, debt, savings, and risks involved.
Then, we’ll build a long-term view that is safer, smarter, and aligned with your life goals.

Below is a detailed assessment from a Certified Financial Planner’s point of view.

Monthly Cash Flow: Check the Pressure Point
You earn Rs 1,19,000 per month.

Your current EMI is Rs 37,000.

You save Rs 22,000 monthly.

That leaves around Rs 60,000 for groceries, bills, mother’s needs, etc.

If you add another loan EMI of Rs 30,000–Rs 35,000, your expenses will cross income.

This will stretch your monthly cash flow. It will also increase financial stress.

Any medical emergency or job loss will shake your peace.

Right now, you are financially stable. Adding another large EMI will break that balance.

Buying a plot might feel exciting. But the long-term financial pressure is real.

Home Loan Already Exists: One Major Debt Is Enough
You already have a home loan taken in 2022.

That loan will run for 15 years. This is already a long-term commitment.

Taking a second loan means you are tied up in two EMIs for many years.

If any job shift or family health issue happens, your loan repayment will become risky.

Avoid multiple long-term loans. Especially if you are the only earning member.

It is better to clear one big loan before taking another.

Land Purchase: Will It Add to Your Wealth or Stress?
The land is in a developing area.

But it will take many years for that area to get demand.

Property is not a liquid asset. You can’t sell quickly if you need cash.

Land does not give rent. So it will not give you any income for now.

It will only increase your EMI.

So this land will not help you in any financial goal soon.

You also need to pay property tax and maintenance cost for empty land.

Why Saving Rs 15,000 Extra Is a Better Idea
Saving Rs 15,000 more per month will make your total monthly saving Rs 37,000.

This is almost one-third of your income. A very strong saving habit.

It builds a solid emergency fund.

You can plan for future goals like mother’s medical care, retirement, or child’s education.

This saving can go into safe and growth-focused mutual funds.

Always go for actively managed mutual funds via Certified Financial Planner and MFD.

Avoid index funds. Index funds just follow the market, no expert hand.

Active mutual funds aim to beat the market and create real wealth.

Avoid direct mutual funds also.

Direct funds offer no personal guidance, no emotional support, and no protection during market fall.

Invest through a Certified Financial Planner who works with a Mutual Fund Distributor.

Emotional Angle: Caring for Mother Comes First
Your mother is asking you to buy the land.

She may see it as a safe asset for your future.

Her concern is from love, not from numbers.

You need to explain your full financial picture to her.

Explain how you are already handling one home loan.

Tell her how buying another property may block future options.

Share how saving more will give you flexibility, safety, and peace.

If needed, you can take her with you to meet a Certified Financial Planner.

Emergency Fund: First Priority Before Any New Investment
Right now, how much do you have in a savings bank or liquid fund?

You must keep 6 months of expenses as emergency fund.

That will be Rs 2.5 lakhs minimum.

This money should be in FD, liquid fund or ultra-short debt fund.

Only after that, long-term investment should begin.

Existing Savings: Let’s Check Where You Are Putting It
You are saving Rs 22,000 monthly in SIP, RD, PPF, NPS, LIC and Digigold.

This mix is not balanced.

Too many instruments dilute wealth creation.

LIC gives low return and is insurance linked.

If LIC is investment plus insurance, consider surrender.

Shift that amount to mutual funds instead.

Digigold is not a safe investment. It is not regulated well.

Keep gold as jewellery, not as monthly investment.

RD is low-return and taxable. Use only for short-term plans.

NPS is good for retirement. Continue with it.

PPF is safe and tax-free. Good for long-term security.

SIP into good mutual funds via MFD with CFP is best for wealth creation.

Job Security: Build a Buffer Before Making Commitments
In IT sector, layoffs and job shifts are common.

You are the only earning member in the family.

So building financial buffer is important.

Take zero new liabilities.

Increase liquid assets.

This gives confidence in any job-related stress.

Retirement Planning: Think of Future You
You are 30 now.

Retirement may look far. But 25 years will pass fast.

Start building retirement corpus now.

Allocate a fixed part of savings into retirement mutual fund schemes.

Use SIP and step-up SIP every year.

Retirement should not depend on others or asset sale.

Land cannot support retirement.

Mutual funds and PPF can.

Health Planning: Is Your Medical Cover Enough?
You mentioned medical expenses.

Do you and your mother have health insurance?

If not, take it right away.

For mother, senior citizen plan may be costly, but it is needed.

Without insurance, even small illness will break savings.

You must protect your health and finances both.

Marriage Planning: Don’t Postpone Due to Finances
You said you are postponing marriage due to money pressure.

That shows you are responsible. That is a good quality.

If you keep EMI low and savings high, marriage won’t add big burden.

A strong savings plan builds confidence to support a new family.

First clean up your savings strategy. Then slowly prepare for future life goals.

What Should Be Your Next Steps?
Stop all new big expenses or loans.

Build an emergency fund of Rs 2.5 lakhs minimum.

Clean up savings. Stop Digigold and LIC.

Invest that amount into mutual funds via MFD with CFP support.

Continue SIPs in good active mutual funds.

Step up SIP by Rs 15,000 from now.

Protect your and mother’s health with insurance.

Keep home loan EMI as only long-term debt.

Meet a Certified Financial Planner once a year for goal review.

Finally
Buying land now will only increase your stress.

It will not help you reach any life goal.

On the other hand, increasing your monthly savings gives you power and peace.

You can build wealth slowly and safely.

You will be more ready for marriage and retirement both.

One strong loan is enough.

Add no more pressure.

Add savings instead.

This is the right step for your future.

You are doing very well in your current savings.

Just improve structure and clarity.

Make every rupee work better for your future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment