Age - 43years, Own house - Value around 50 Lacs, MF investments - 35 Lacs, Equity SIPs running - 20k, FDs - Emergency fund (5 Lacs), Salary - 30 Lacs p.a., I would like to buy house of 2 crore in next 2-3 years.. when should I sell my current house which is valuing around 50 Lacs to have limited tax liability.

Ans: Current Situation Analysis

Your house in your native place is valued at Rs 45 lakh, with a housing loan of Rs 9 lakh. The rental income of Rs 6,000 per month may not be sufficient to justify holding the property if you are not planning to return in the next 10 years.

Evaluating the Options

Selling the House: Pros and Cons

Pros:

You can clear the housing loan of Rs 9 lakh.

You can invest the proceeds in higher-return assets.

Eliminates the hassle of managing a rental property.

Cons:

You may lose potential appreciation in property value.

Emotional attachment to the property.

Investment Options for Long Term

1. Mutual Funds:

Equity Mutual Funds: Suitable for long-term growth. Diversify across sectors and companies.

Hybrid Mutual Funds: Mix of equity and debt. Provides balanced growth with some stability.

2. Public Provident Fund (PPF):

Safe and tax-efficient.

Offers decent returns over the long term.

3. Systematic Investment Plans (SIPs):

Regular, disciplined investment in mutual funds.

Beneficial for averaging out market volatility.

4. Debt Mutual Funds:

For stability and regular income.

Less risky compared to equity mutual funds.

Final Insights

Selling the house and clearing the loan can free up capital for more productive investments. Diversifying into mutual funds, PPF, and SIPs can provide balanced growth and stability over the next 10 years.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Hello;

Following can be earmarked towards house purchase in Delhi(2.25 Cr):

1. Sale of RE property worth 90 L.

2. EPF balance of 30 L.

3. Direct stocks worth 80 L.

4. Part of MF balance worth 25 L.

Balance 1 Cr corpus in MFs will grow 1.25 in 2 years time frame.

50 L maybe allocated for son's higher education.

Balance 75 L may remain in mutual funds for additional 5 years.

Also you may begin a monthly sip of 2 L into a combination of pure equity mutual funds for 7 years duration.

The 75 L lumpsum and 2 L monthly sip will grow into sums of 1.32 Cr & 2.64 Cr respectively.

Hence your total corpus would be 3.96 Cr

You may utilise ~ 1 Cr for daughter's education and marriage.

If you utilise the balance 3 Cr to buy an immediate annuity from a life insurance company, you may expect a monthly income of 1.10 L(post tax).

This alongwith your monthly pension of 1 L will lead to a comprehensive retirement monthly income of 2.1 L.

Happy Investing;

Ans: At 41, you are in a good position.

You already have multiple assets.
You also have a stable income and investments.

Let us now assess your financial life in full.
We will plan a clear and practical 360-degree solution.

This answer will help you be debt-free in 5 years.
It will also improve your long-term wealth creation.

Let us go step by step.

Understand Your Current Financial Position
Your take-home salary is Rs. 1,42,000 monthly.

SIP is Rs. 12,000 per month. That is a good habit.

Stocks holding is Rs. 7 lakhs.

Fixed deposit is Rs. 4 lakhs.

First home loan is Rs. 27 lakhs. EMI is Rs. 27,500.

House value is around Rs. 60 lakhs.

Second home is under construction. EMI is Rs. 32,000 now.

Value of second property is Rs. 90 lakhs.

You have already paid Rs. 44 lakhs.

Father’s property worth Rs. 40 lakhs is also available.

Your goal is to close all loans in 5 years.

Strengths in Your Financial Profile
You are investing monthly in mutual funds.

You are not fully dependent on real estate.

You have equity and FD in portfolio.

Your income supports your current EMI payments.

You have clear goal to be debt-free.

You have an asset (father’s property) available to use.

Areas That Need Better Attention
Too much money is stuck in real estate.

Two properties with two loans increases your risk.

Property value appreciation is slow.

Rental yield is also very low in most cities.

Your EMI outgo is around Rs. 59,500 monthly.

That is about 42% of your take-home pay.

This may reduce flexibility in future.

Also limits your monthly SIP potential.

Let Us First Analyse the Home Loans
First loan is Rs. 27 lakhs at EMI Rs. 27,500.

Second loan EMI is Rs. 32,000 now, may increase later.

EMI may go up after full disbursement.

That means future pressure on your cash flow.

Total home loan EMI may cross Rs. 65,000 monthly.

If interest rates go up, EMI pressure will grow more.

Should You Sell the Father’s Property?
Let us analyse that in detail.

Property value is Rs. 40 lakhs.

No rental or income is being generated from it.

It is idle and blocking financial growth.

Selling can release funds to reduce loan burden.

Emotionally, it may be hard.

But financially, it is the better decision.

Home loan interest is 8–9% or more.

FD or real estate gives lesser return than that.

By closing loan, you save high interest.

It improves monthly cash flow immediately.

You can then use surplus for investment and goal planning.

So yes, it is wise to sell that property now.

Which Loan to Close with the Sale?
This is a key decision.

Let us compare both home loans.

First loan balance is Rs. 27 lakhs.

House is completed and may give rent.

Second home is under construction.

EMI will rise further as disbursement happens.

You have already paid Rs. 44 lakhs in second home.

Closing second loan may not be practical now.

So best option is to close the first loan.

You remove full EMI of Rs. 27,500.

That gives instant relief in monthly budget.

You reduce risk and get ownership clarity.

What to Do With the EMI Savings?
This step is most important.
You must plan what to do after loan is closed.

Monthly EMI saved = Rs. 27,500.

Use this amount to increase SIP.

Don’t spend this saving casually.

You already have Rs. 12,000 SIP.

Increase total SIP to Rs. 35,000 or more.

This will grow wealth over next 10–15 years.

Use regular plans via Certified Financial Planner.

Avoid direct funds.

Direct funds give no personalised review.

CFP will help rebalance and tax plan too.

About the Second Property Under Construction
You have already paid Rs. 44 lakhs.

Try to avoid additional loans if possible.

Fund balance payment from SIP, stocks, or bonus.

Don’t take personal loans to complete this.

After construction, you may get rent or use it.

Even after full loan disbursement, keep EMI under 30% of income.

If EMI crosses 40%, reduce SIP or sell unused stocks.

Don’t let your cash flow get too tight.

Review Your Equity and FD Position
Stocks worth Rs. 7 lakhs.

FD is Rs. 4 lakhs.

Maintain FD for emergency only.

Don’t break FD unless urgent.

Stocks may be kept for long term.

If some stocks are not performing, shift to equity mutual funds.

Equity funds are managed better by professionals.

Avoid investing directly without research.

Always link investments to clear goals.

Avoid Common Mistakes in This Phase
Don’t buy more real estate now.

You already hold two properties.

Avoid buying land or plots again.

Don’t reduce SIP to manage EMIs.

That will affect long term goals.

Avoid switching to direct mutual funds.

Regular route gives better support with CFP.

Don’t expect property price to double in 5 years.

Real estate growth is slow now in many places.

Don’t delay gold or insurance planning.

Insurance and Emergency Coverage
You should have term insurance equal to 10–15 times annual income.

Health insurance for you and family is also needed.

Keep emergency fund equal to 6 months expenses.

Don’t mix insurance and investment.

Don’t invest in ULIPs or traditional plans.

If you hold any LIC endowment or ULIP, surrender after lock-in.

Reinvest that amount in mutual funds.

Smart Goals to Achieve in Next 5 Years
Let us fix simple and smart goals for you.

Be debt-free in 5 years. Close first loan now.

Complete payment for second property safely.

Increase SIP to at least Rs. 35,000 monthly.

Build emergency fund of Rs. 4–5 lakhs.

Get term insurance and health cover.

Create investment plan for retirement.

Review asset allocation every year.

Meet Certified Financial Planner yearly.

Build liquid portfolio along with real estate.

Final Insights
You have a strong income and asset base.

But your EMI load is growing fast.

It is better to simplify and reduce loans.

Sell father’s property now and close the first loan.

Use EMI savings to increase SIP and grow wealth.

Don’t add more to real estate.

Stay focused on long-term goals like retirement.

Use regular mutual fund route with CFP support.

Avoid direct funds as they give no advice or review.

Keep FD only for emergency.

Build balance between real estate, equity, and liquidity.

Make your money work harder, not just lie in property.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: – You have built a strong financial base by age 35.
– Rs 50 lakh in mutual funds is very impressive.
– You are earning Rs 2 lakh monthly with Rs 45,000 expenses only.
– This gives high surplus and good future flexibility.
– Let’s now assess when to buy a Rs 1 crore house.

» Understand Your House Buying Capacity
– You want to buy a Rs 1 crore house.
– Buying it fully with savings may affect long-term growth.
– A home loan can help bridge this gap.
– But home loan EMI must be affordable, not stressful.
– Ideal EMI is not more than 30–35% of income.
– In your case, that’s around Rs 60,000–70,000 monthly.

» Your Existing Investments Are Well Spread
– Rs 50 lakh in mutual funds offers good growth potential.
– Rs 9 lakh in stocks is high-risk. Monitor it carefully.
– Rs 7 lakh in PPF and Rs 12 lakh in EPF is long-term locked.
– Rs 6 lakh in FD gives safety and liquidity.
– You have all major categories well covered.
– That brings a good balance in your portfolio.

» Calculate Safe Down Payment First
– You need at least 20% down payment.
– For Rs 1 crore house, that is Rs 20 lakh minimum.
– But keeping Rs 25–30 lakh ready is safer.
– You can use part from FD and part from mutual funds.
– Don’t use full FD or full mutual fund for down payment.
– Keep Rs 5–6 lakh liquid even after down payment.

» Avoid Disturbing Long-Term Investments
– Mutual funds must grow for wealth creation.
– Don’t redeem full MF holdings for house.
– PPF and EPF should not be touched at all.
– They are for retirement and safety net.
– Only partial redemption of mutual funds is fine.
– Prefer redeeming from short-term debt mutual funds, if held.
– Avoid equity mutual fund redemption unless necessary.

» Understand Tax Impact Before Redeeming MFs
– Equity mutual fund LTCG above Rs 1.25 lakh is taxed at 12.5%.
– STCG is taxed at 20% flat.
– Debt mutual funds are taxed as per your income slab.
– A Certified Financial Planner can help minimise tax impact.
– Redeem smartly and over 2 financial years, if needed.

» Home Loan Must Not Disturb Other Goals
– A Rs 70,000 EMI is manageable for your income.
– You must still continue SIPs while paying EMI.
– Don’t stop investing for future goals like retirement.
– Check if loan tenure and EMI allows SIPs to continue.
– You are saving around Rs 1.5 lakh monthly now.
– That is enough to handle EMI and SIP both.
– Still, review exact cash flow once EMI starts.

» Right Time Is When Three Things Match
– You should buy when down payment is ready.
– You must have EMI surplus without stopping SIPs.
– You must be sure of staying in that location long-term.
– If all these match, that is your right time.
– Don’t rush only due to peer pressure or emotional pull.
– Also don’t wait endlessly expecting prices to fall.

» Avoid Buying House for Investment
– You can buy house for own use.
– But never buy a second house for investment.
– Real estate needs big money and gives low returns.
– It also lacks liquidity and has high maintenance.
– Mutual funds perform better long-term with flexibility and liquidity.

» Choose Location Based on Long-Term Plans
– Don't buy house just near office.
– Office may change, city may change.
– Buy only in a place where you will settle long-term.
– Otherwise, rent is better than buying.
– If not sure of location, delay buying.

» Keep Emergency Fund Ready Separately
– After buying house, liquidity becomes tight.
– So keep Rs 5–6 lakh as emergency fund.
– Don't use this for down payment or EMI.
– Keep it in sweep FD or short-term debt fund.
– It protects you if income is delayed or job is lost.

» Buy After Tracking Credit Score
– Your loan approval depends on CIBIL score.
– Track your credit report before applying.
– Keep score above 750 for better loan terms.
– Don’t apply with multiple banks at once.
– A Certified Financial Planner can guide better loan terms.

» Don’t Stop Equity Investing for House
– Equity investing builds your long-term wealth.
– SIPs should continue even after house EMI starts.
– Even if you reduce SIP slightly, don’t stop it.
– SIPs will help you later for kids’ education or retirement.
– Long-term compounding will build real wealth.

» Never Use PPF or EPF for Buying House
– PPF and EPF are for your retirement.
– These are tax-efficient and give safe returns.
– Withdrawing from them for house is not wise.
– That will hurt you later during retirement years.

» Direct Funds Are Not Recommended for House Goal
– Direct funds have no guidance or help during market falls.
– You may exit or switch wrongly under panic.
– Regular funds through MFD and Certified Financial Planner are safer.
– They review portfolio, help with tax planning, and goal realignment.
– For big goal like house, you need human guidance.

» Don’t Use ULIPs or Endowment Plans
– If you hold any ULIP or LIC endowment, review them.
– These give low returns and long lock-ins.
– If holding any, surrender and shift to mutual funds.
– That builds corpus faster and with flexibility.

» Delay Buying if Location or Job Is Not Stable
– If you expect job transfer, then delay the house.
– If city preference is not fixed, then wait.
– A house becomes a long-term commitment.
– Wrong location choice becomes very costly later.

» Consider Loan with Flexi-Repayment
– Some banks allow step-up or part pre-payment of loan.
– You can reduce interest by paying lump sums.
– Use bonuses or annual hikes to repay part of loan.
– That way your loan closes faster without pressure.
– Don’t use SIP amounts for this. Use only bonus or surplus.

» Maintain Good Ratio of Loan to Investment
– After taking home loan, your asset-to-loan ratio must stay healthy.
– Never let loan grow faster than your net worth.
– Review portfolio every 6 months after home loan.
– Make sure SIP, emergency fund and insurance are intact.
– House should not disturb your financial freedom.

» Get Proper Term Insurance Before Taking Loan
– Loan increases your liability.
– Take a term insurance of Rs 1 crore immediately.
– That protects your family from EMI burden.
– Don’t take insurance-linked to home loan from bank.
– Take separate term plan from own analysis.

» Finally
– You are financially ready for a house soon.
– Wait only if job location is not stable.
– Start preparing your down payment and documents now.
– Keep mutual funds growing alongside the loan.
– Review entire plan with a Certified Financial Planner yearly.
– Let the house be a lifestyle asset, not an emotional burden.
– If done right, it will give comfort and pride without hurting future goals.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: At 43, with two children and dual home loans, you're at a crucial stage. Your income, savings, and clarity show the right mindset. Let’s build a 360-degree roadmap to bring balance, cash flow, and growth.

? Understand your current financial flow

– Your monthly take-home is Rs. 2 lakh.
– Home loan EMIs likely take a major portion.
– Rental income adds Rs. 25,000 monthly, which gives some relief.
– Emergency fund of Rs. 15 lakh gives you strong backup.
– That is a good step taken already.

? Home loans – Review and prioritise

– First home loan outstanding is Rs. 15 lakh.
– Second home loan is Rs. 96 lakh, a large burden.
– Selling the first house can free up capital.
– If interest rate is above 8.5%, prepayment becomes attractive.
– Focus on reducing second home loan principal first.
– That will reduce EMI and interest burden over time.
– High EMI limits future investments and cash flow flexibility.
– Clearing the smaller loan brings short-term relief.
– But reducing the large loan brings long-term freedom.

? Evaluate the first home before selling

– Is the first property fetching low rent return?
– Rs. 25,000 monthly rental is not attractive on most real estate.
– You also pay tax on rental income.
– Selling it to reduce the second loan is more efficient.
– Avoid real estate as an investment going forward.
– It locks capital and offers poor liquidity.
– Mutual funds give better flexibility and tax efficiency.

? Life insurance – Realign it properly

– You have a Tata AIA ULIP-based term cover of Rs. 1 crore.
– This is a mix of investment and insurance.
– ULIPs often have high charges and low flexibility.
– It is better to separate insurance and investment.
– Buy a pure term policy of Rs. 1.5 crore from a trusted insurer.
– You’ll get high cover at low premium.
– Surrender the ULIP after lock-in if it is not giving good returns.
– Reinvest the proceeds in mutual funds through regular plans.
– Avoid future investment in ULIP or insurance plans with returns.

? LIC policies – Time to review

– LIC policies are typically endowment or money-back types.
– These give low returns, often less than inflation.
– They don’t suit long-term wealth creation.
– Check policy maturity dates and surrender values.
– If they have crossed lock-in and surrender charges are low, exit them.
– Reinvest proceeds in actively managed mutual funds through a Certified Financial Planner.

? NPS – Continue investing with goal clarity

– Tier 1 balance is Rs. 7 lakh with Rs. 11,000 monthly SIP.
– Tier 2 balance is Rs. 1 lakh with yearly Rs. 30k to Rs. 40k investment.
– NPS is a long-term product, mainly for retirement.
– Tier 1 gives tax benefits under 80CCD.
– But withdrawals are partially locked at maturity.
– Don’t rely only on NPS for retirement.
– Combine it with mutual funds for better flexibility.

? Mutual funds – Shift to structured approach

– You invest Rs. 5,000 monthly in direct mutual funds.
– Direct funds have lower costs but lack personalised tracking.
– Without expert guidance, wrong funds may reduce long-term returns.
– Switch to regular plans through a CFP and trusted MFD.
– A Certified Financial Planner ensures your funds match your goals.
– The support and reviews are more valuable than saving few rupees on expenses.
– Focus on active mutual funds, not index funds.
– Index funds have no downside protection and lack expert fund management.
– Actively managed funds give better returns with professional handling.

? Children’s education – Prepare with discipline

– Your daughter is 11 years old.
– Her higher education need is likely in 6-7 years.
– That gives you limited time.
– Use part of the house sale proceeds to build a dedicated corpus.
– Invest in a balanced mutual fund for 3-5 year goal.
– Add SIPs through a Certified Financial Planner.
– For your younger child, you have more time.
– Start SIP in large-cap or flexi-cap fund.
– Increase investment each year with your income rise.
– Avoid relying on PPF alone for higher education.

? Emergency fund – Well maintained

– Rs. 15 lakh as emergency fund is excellent.
– Keep it in liquid mutual funds, not savings accounts.
– This should not be touched for goals or luxury spending.
– It gives peace of mind and stability.

? Monthly cash flow – Post loan adjustment

– Selling first house can give lump sum.
– Use most of it to reduce second home loan.
– Keep only Rs. 3 lakh to Rs. 4 lakh aside for urgent needs.
– Reduced EMI gives room for better savings and investments.
– Once EMI drops, increase SIP in mutual funds.
– Avoid upgrading lifestyle unnecessarily after loan drop.
– Use cash flow boost to increase wealth creation.

? Asset allocation – Bring proper balance

– Real estate forms a large part of your net worth.
– Mutual funds and liquid assets are less.
– This creates poor diversification and low liquidity.
– Reduce dependency on real estate.
– Shift towards equity mutual funds and debt funds.
– Your emergency fund and PPF handle the debt part.
– So, future investments should be more into equity.

? Mutual fund taxation – Be aware

– When selling mutual funds, taxation matters.
– Equity funds held over one year attract 12.5% LTCG tax above Rs. 1.25 lakh.
– Short-term equity gains are taxed at 20%.
– Debt funds are taxed as per your income slab.
– So stay invested for long term and avoid frequent switching.
– Your Certified Financial Planner will help optimise tax and withdrawal planning.

? Yearly financial check-up – Build the habit

– Review your financial position once every year.
– Track your goals, loans, investments and insurance.
– Check if your SIPs match goal timelines.
– If you get a bonus or hike, increase SIPs.
– Update your nominee details in all investments.
– Keep your spouse informed about the financial plan.

? Avoid these common mistakes

– Don’t keep LIC and ULIPs as long-term core plans.
– They don’t beat inflation or offer flexibility.
– Don’t invest based on tips or trending funds.
– Avoid credit card EMI for purchases.
– Don’t borrow to invest.
– Avoid index funds, which just follow market ups and downs.
– Choose active funds with proven track record and fund manager expertise.

? Your next financial steps

– Sell the first house and reduce second home loan.
– Exit LIC and ULIP after proper surrender analysis.
– Shift all new MF investments to regular plans via MFD and CFP.
– Use Certified Financial Planner to align goals with investments.
– Increase SIP slowly and match it to children’s education and retirement goals.
– Set a monthly tracker and review progress.
– Stay focused and disciplined.
– Don’t delay. The next 5 years are crucial for you.

? Finally

– You have income, awareness, and intent.
– That’s a strong starting point for anyone.
– Freeing up cash flow by selling the property is a wise step.
– Reducing loan burden brings mental peace and long-term benefit.
– Avoid mixing investments with insurance.
– Keep mutual fund SIPs as your main wealth creation tool.
– Take support from a Certified Financial Planner for best guidance.
– Stay committed, and you’ll see the results.
– Wealth is built step by step, not overnight.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment