Hello Sir, me and my planning to buy apartment for 55 lakhs and down payment is 10 lakhs remaining we are going for a loan (44 lakhs) and tenure is 24 years. We have no backup money. Our total monthly income is 28000/- and no debts. Is this a good idea?

Ans: This depends upon the type of job, your income level and family dynamics. Kindly take an informed decision.

Ans: Hi,

Buying a house is one of the big decisions of life as it provides you with security and ownership of an asset but when you take a loan it demands your commitment towards EMI payments.

In your case, for a loan of 44 lakhs for a duration of 24 years if I assume interest rate of 8%, the EMI is approx. 35000.
This works out to under 20% of your monthly income.
This is a good ratio for EMI payment compared to your monthly income.

Typically we advise to have monthly expenses not more than 40% of your monthly income with EMIs of not more than 40% of monthly income. This will ensure you have a saving/investment potential of at least 20% of monthly income.

You are well placed towards EMI payments and if your monthly expenses are well managed, your saving/investment should help build a good corpus for other/future goals.

Thanks & Regards
Janak Patel
Certified Financial Planner.

Ans: You are 35 years old. Your take-home income is Rs 75,000 per month.
You already have a debt of Rs 10 lakhs.
There is no savings in hand right now.
These three points are very important.

Let us understand them one by one:

Rs 10 lakhs debt means you are already repaying an EMI.

With Rs 75,000 monthly income, your cash flow is limited.

Having no savings makes your situation vulnerable to emergencies.

In this situation, buying a new property worth Rs 1.4 crore is a big step.
Let us assess the implications of this move from a 360-degree view.

Monthly Cash Flow Stress

Let us estimate how much EMI you might need to pay.

For a 1.4 crore loan with 20 years term, EMI will be around Rs 1.2–1.3 lakhs.

But your take-home salary is Rs 75,000.

You may expect rental income of Rs 50,000.

Still, EMI exceeds your monthly inflow.
This creates a negative cash flow of Rs 45,000 to 55,000 per month.
You are already repaying for the Rs 10 lakh loan.
This adds further strain on your cash flow.

You may depend on personal loans or credit cards in future.
This may lead to a debt trap.

Risk of Vacancy or Rental Delay

Real estate income is not guaranteed monthly.
Tenants may delay payments or vacate anytime.
You may lose 1 to 3 months rent per year during vacancy.

During those months, you will pay the EMI from your pocket.
This will create more financial pressure.
With no emergency fund, it becomes risky.

You Have No Emergency Buffer

You mentioned zero savings.
That is a very critical concern.

Any health issue can disturb your finances.

Job loss or income cut can cause heavy damage.

If tenants vacate suddenly, EMI burden will be yours alone.

A Certified Financial Planner always advises to build an emergency fund first.
3 to 6 months of expenses should be saved in liquid form.
That should be your first financial priority.

Buying Property on Loan: Costly in Long Term

Let us assess this step from a long-term view:

A 1.4 crore loan for 20 years can cost over Rs 2.8 crores total with interest.

You will repay more than double the principal.

You are expecting Rs 50,000 rent per month.

But there are other costs too.

Hidden costs include:

Property tax

Maintenance

Repairs and painting

Insurance

Brokerage for tenant

Legal issues if any

Your net rental yield may drop below 3% annually.
This is not a high return.

Alternatives Can Give Better Control

With Rs 75,000 income and Rs 10 lakh debt, here is what you can do:

Step 1 – Build Emergency Corpus First

Save at least Rs 1.5 lakhs in a savings or liquid fund.

This will act as cushion for any emergency.

It avoids borrowing at high interest.

Step 2 – Start Debt Repayment Plan

Pay off high interest debt first, if any.

Avoid minimum payments on credit cards.

Negotiate better terms with lenders if possible.

Step 3 – Start Small SIPs in Regular Mutual Funds

Start Rs 2,000 to Rs 3,000 monthly SIP in regular mutual funds.

Invest via a Certified Financial Planner.

Direct mutual funds give no advice or hand-holding.

Wrong fund choice can reduce your returns.

Regular mutual funds through MFD with CFP guidance give:

Professional fund selection

Rebalancing advice

Tax planning

Behavioural coaching in tough markets

Direct mutual funds have no such support.
You may choose the wrong fund and lose returns.
The so-called "savings" on commission can cost you much more.

Your Rental House Plan: Review Key Points

You plan to buy a Rs 1.4 crore property to earn Rs 50,000 rent.
Let us relook at key aspects:

1. Rental Yield:
Rent is Rs 6 lakhs per year.
On a Rs 1.4 crore property, that is just 4.3%.
After expenses, net yield is even lower.

2. Loan Repayment:
Total EMI outflow in 20 years is over Rs 2.8 crores.
Property value may not grow in the same proportion.

3. Illiquidity:
Property cannot be sold quickly.
If you face financial need, this becomes a major problem.

4. Leverage Risk:
You are trying to buy big with borrowed money.
This increases financial risk.
Your income cannot support the EMI even with rental inflow.

Better Alternative Plan: Step-by-Step Financial Building

• First 6 months:

Cut unnecessary expenses.

Build emergency fund of Rs 1.5 lakhs.

Clear part of your Rs 10 lakh debt.

• Next 6 to 12 months:

Start SIPs of Rs 3,000 to Rs 5,000 monthly.

Take help from Certified Financial Planner.

Avoid real estate and ULIPs at this stage.

• Year 2 onwards:

Increase SIP gradually as income improves.

Clear your existing debt completely.

Build goal-based investment plan.

• Future plans:

Once you have Rs 15–20 lakhs corpus, evaluate property.

But buy only if cash flow supports EMI.

Prefer loan EMI not exceeding 40% of income.

Rent alone should not be your support for EMI.

Investment vs Asset Ownership

A rental house gives you ownership feeling.
But from financial angle, your focus should be wealth creation.

Actively managed mutual funds through Certified Financial Planners offer:

Flexibility

Tax efficiency

Professional fund management

Goal tracking

Liquidity

Real estate gives none of these.
Liquidity is poor.
Rental yield is low.
Buying on heavy loan is very risky.

Your Financial Stability Is Priority

At this point, your priority is stability.
Avoid aggressive financial decisions.

Debt of Rs 10 lakhs plus Rs 1.4 crore more can collapse your future.
Instead, take small consistent steps.

Build:

Emergency fund

SIPs

Debt repayment

Insurance coverage

Tax plan

This path leads to financial freedom.
Rental property can come later.

Avoid These Mistakes

Don’t chase rental yield with 100% loan.

Don’t invest all earnings into one single illiquid asset.

Don’t ignore insurance and savings.

Don’t assume rent will come on time always.

Don’t take emotional decision in property buying.

Finally

Buying a rental house now is not advisable.
Your income cannot support it.
Your savings are nil.
Your debt is already Rs 10 lakhs.

Real estate is not a good investment for your case today.
It creates heavy EMI pressure.
Instead, build foundation first.

Start with small SIPs

Clear existing debts

Build emergency reserves

Set clear financial goals

Get guidance from Certified Financial Planner

Take slow and safe steps.
That will take you to long-term wealth.
Don’t stretch your income for big loans.
Financial peace matters more than property ownership.

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

Ans: You seem very thoughtful about your future and responsibilities. I appreciate your planning attitude. Let's review your decision fully from all angles before you proceed with the apartment purchase.

Current Financial Snapshot

Property value: Rs. 55 lakhs

Down payment: Rs. 10 lakhs

Loan amount planned: Rs. 44 lakhs

Loan tenure: 24 years

Combined monthly income: Rs. 28,000

No current loans or liabilities

No backup or emergency funds

You’re looking to purchase a high-value asset with a small monthly income. This needs deep analysis. Let’s evaluate this from different angles and guide you in a practical way.

Loan Burden Compared to Income

EMI for Rs. 44 lakhs over 24 years will be high.

Your EMI will likely cross Rs. 30,000 monthly.

Your income is Rs. 28,000 only.

Your EMI is more than your income.

This is financially unworkable. No bank will approve this loan under these numbers. Most banks allow only 40% to 50% of income as EMI. In your case, even if they approve, it’s financially dangerous.

Cash Flow and Lifestyle Pressure

No money left after EMI.

You won’t afford electricity, food, or bills.

No funds for medical needs or festivals.

Life will become financially stressful.

You’ll have to borrow for daily needs. That will lead to a debt trap. Any minor emergency will push you into personal loans or credit card debt.

Emergency Fund is Missing

No backup savings is a major concern.

Life is uncertain. Medical, job loss, and family needs arise anytime.

You should build minimum Rs. 1.5 lakhs emergency fund first.

Without an emergency fund, even small problems will feel like big disasters. Financial stability depends on protection against surprise expenses.

Job and Income Stability

Monthly income is Rs. 28,000 combined.

It’s not clear if it’s fixed or irregular.

No mention of income growth chances.

If your job is not permanent or secure, this purchase becomes even more risky. Even if your job is stable, a single delay in salary will create panic. Job loss will force you to default on EMI.

Other Family Responsibilities

You didn’t mention dependents.

If you have children or parents, costs increase.

School, health, and family support need money.

If any dependent needs money, you won’t be able to support them. All your money will be stuck in the apartment EMI.

Home Loan Rejection Risk

Banks check EMI to income ratio.

Your loan will be rejected or disbursed in lower amount.

Even if sanctioned, interest rate may be very high.

If bank rejects, builder may cancel the agreement. You may lose your Rs. 10 lakh down payment. This is very risky.

Rental Vs. Owning Perspective

Renting a home costs much less monthly.

You can rent the same flat for Rs. 10,000 or Rs. 12,000.

Use the remaining money for savings and growth.

You will get mental peace, flexibility, and time to plan. Owning should not happen at the cost of survival. Right time is important.

Emotional Angle vs Financial Reality

Emotionally buying house gives pride.

But money decisions need logic and discipline.

Buying beyond ability causes lifelong stress.

Even if friends and relatives push, don’t proceed now. Your current income cannot support this purchase.

Alternative Plan You Can Follow

You still have good financial potential. Here’s a better and safer route:

Start a monthly savings habit with mutual funds.

Invest Rs. 5,000 per month in regular funds with help of CFP.

Avoid direct funds. You need guidance at this stage.

Direct funds are risky if chosen without deep understanding.

A Certified Financial Planner (CFP) and Mutual Fund Distributor (MFD) will guide you. They offer right schemes based on your goals and risk level. Regular plans give advice, portfolio tracking, and emotional support.

Build a 6-month emergency fund.

Target Rs. 1.5 to 2 lakhs first in liquid mutual funds.

Don’t touch this fund unless it’s life emergency.

Once emergency fund is ready, increase SIP slowly. Over time your income will grow. Your savings will also grow. You can buy a house later with a bigger down payment. That time loan amount will be less.

Don’t Use All Savings for Down Payment

You said Rs. 10 lakhs down payment.

Is it all your life savings?

Then you’re left with zero buffer.

Never empty your bank account for one property. Keep at least Rs. 2 lakhs as savings. Also, home buying has hidden charges—registration, interiors, society, and maintenance.

Other Smart Financial Habits to Build Now

Here are some action steps you should start right now:

Track your monthly expenses in a notebook or mobile app.

Cut all unnecessary expenses.

Avoid credit cards unless paid full on time.

Start health insurance. Rs. 5,000 yearly gives Rs. 5 lakhs coverage.

Buy only pure term insurance, not ULIP or endowment plans.

Never mix insurance with investment. ULIPs and traditional LIC policies have low return and high lock-in. If you hold any such plans, consider surrendering and investing in mutual funds through CFP.

Long Term Vision and Life Goals

Buying house is only one life goal. But there are many others:

Child education

Retirement

Health protection

Family care

Travel or career change

You need money for all these. If you lock all savings in one apartment, your other goals will suffer.

Real Estate Is Not a Liquid Asset

Apartment cannot be sold easily in emergency.

Property selling takes time, buyers, and good market.

You can’t sell one room if you need Rs. 1 lakh.

That’s why you need liquid and flexible investments too. Don’t treat house as only wealth source. Real estate should not be your financial backbone. Focus on financial health first.

360 Degree Analysis Summary

Let’s recap all angles in short points:

Your income is too low for this home loan.

EMI will cross your income.

No emergency fund is dangerous.

Banks may reject the loan or charge high interest.

Daily life will suffer under EMI pressure.

Renting is better for now.

Save and invest regularly through CFP.

Avoid direct mutual funds without guidance.

Focus on term insurance and emergency fund.

Reconsider property after income grows.

Keep Rs. 2 lakhs always in reserve.

Finally

You are on the right track by asking questions before taking action. That’s very responsible. But buying this apartment now is not suitable for your current situation. It may cause long term stress, financial risk, and life imbalance.

Buying house is a big decision. Right timing, right budget, and right income are important. Delay is better than damage. Start preparing for a better future now with a financial foundation.

You can build assets with discipline and patience. Right guidance from a Certified Financial Planner will help you plan better.

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

Ans: You have a dream. You are acting on it. That is very powerful. Many people keep waiting. You are ready to take decisions. You are earning well. You take care of your parents. You save in PPF. You already have insurance. You think of a backbone for the future. That is wise. I appreciate your planning mindset.

Now we must assess your home buying plan in detail. We will look at your income, expenses, loan, property, and future goals. We will analyse from all sides. We will find the safest way for you.

» Your current financial position
– Your monthly income is Rs. 94,000.
– You give Rs. 15,000 to parents.
– You pay Rs. 6,000 for insurance.
– Your monthly expense is about Rs. 6,000.
– You contribute Rs. 1 lakh yearly to PPF.
– You have no major investment yet.
– You are unmarried and live with parents.
– You plan to move out and buy a flat.

» Home purchase plan
– You liked a 3 BHK flat in Bangalore.
– Cost is Rs. 60 lakhs.
– You plan a loan of Rs. 45 lakhs for 20 years.
– You will arrange Rs. 15 lakhs down payment.
– You want to live there.
– You want to rent out some rooms.
– You see this flat as a backbone for the future.
– This is your dream home.

» Loan impact
– A Rs. 45 lakh loan for 20 years will need a big EMI.
– EMI may be around Rs. 40,000 to Rs. 45,000 monthly.
– This is nearly half your income.
– You will also pay property tax, maintenance, and utilities.
– You must pay society charges, repairs, and insurance.
– Your living cost will increase after moving out.
– Your savings may reduce sharply.
– This can delay wealth creation.

» Rental plan insight
– You plan to rent rooms.
– You may get Rs. 10,000 to Rs. 15,000 per room monthly depending on location.
– Rental income is not guaranteed.
– Tenants can leave anytime.
– You may face vacancy periods.
– You must handle maintenance and tenant issues.
– You must declare rental income for tax.
– Rental yield in cities is usually 2% to 3% only.
– EMI cost is far higher than rent earned.
– Real estate rarely beats inflation with liquidity.
– You will lock a big part of your money in one asset.

» Emotional and personal goals
– You always dreamed to own a home.
– Emotional peace has value.
– It gives pride and comfort.
– A home can give security.
– But financial burden can reduce peace.
– If EMIs eat savings, you may feel trapped.
– We must balance dream and money safety.

» Risks of early home buying
– You are unmarried now.
– Your life may change after marriage.
– Your spouse may work in another city.
– Your career may move you elsewhere.
– If you shift cities, the house becomes a rental property.
– You may prefer a different location later.
– Selling a property is slow and expensive.
– Loan repayment continues even during personal changes.
– You may feel pressure during job loss or salary cut.

» Alternative wealth path
– If you invest instead of buying now, your money grows.
– Mutual funds with active management can give better liquidity and returns.
– You can build a large corpus in 7 to 10 years.
– Later, you can buy a home with higher down payment or full payment.
– You avoid long-term loan pressure.
– You stay flexible for career, marriage, and family.

» Emotional satisfaction vs financial strength
– Your heart wants a home now.
– Your mind wants safety and growth.
– Owning a home feels good but limits flexibility.
– Renting a house is not waste. It is buying flexibility.
– You can stay close to work.
– You can shift easily when life changes.
– You can invest the surplus to grow future wealth.

» Steps if you buy now
– Keep EMI within 30% of income.
– Keep emergency fund equal to 12 months of EMI plus expenses.
– Continue PPF.
– Start mutual fund SIP.
– Increase SIP every year.
– Do not stop investing because of EMI.
– Keep insurance updated.
– Avoid buying furniture or car with loans.
– Keep career growth strong to handle EMIs easily.

» Steps if you delay buying
– Save for larger down payment.
– Grow mutual fund corpus for next 5 years.
– Reassess housing needs after marriage or job shifts.
– Buy with more clarity and lesser loan.
– Keep lifestyle simple while wealth grows.

» Certified Financial Planner role
– A Certified Financial Planner can make a detailed cash flow plan.
– They check your risk tolerance.
– They project expenses, tax, and loan impact.
– They suggest safe investment mix.
– They help you protect both dream and money safety.
– This ensures no regret later.

» Finally
– You are doing very well by planning early.
– Buying a home is emotional and financial both.
– It can bring pride or pressure based on timing.
– With Rs. 94,000 income, a Rs. 45 lakh loan is heavy.
– It may be manageable if career grows, no job loss, no emergencies.
– But risk remains high for next 10 years.
– Think of flexibility, future family plans, and investment opportunities.
– Sometimes waiting a few years builds more safety and power.
– You can own your dream home with more peace and less burden.
– Discuss with a Certified Financial Planner before finalising.
– This one step of advice can save years of stress.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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