Hi, Iam 42 and married for last 12 years with two kids. Due to the scuffles between us my wife left me with kids and have been living away for last 4 years. During this time, a girl of, 15 years younger to me, came in my life and I found a true soul mate in her, may be due to the void which was created because of my wife leaving me. Last year that girl got married to someone else, as she has already planned and conveyed to me right in the beginning of our relationship. In, last one year, my wife is also trying to come close to me, as I have been bearing all their expenses and have been trying to be a good and reasonable father and husband (though I myself is pretty lonely, after my girl's departure) and my wife and kids are now finding me to be a great and responsible man. But me, at the deep down level, is drowning every single day and finding it unbearable to live without my girl. Do not know what to do. That girl is living happily with her husband and planning for the kids. At the same time, she on and off calls me and ask for the monetary favours, which I have been fulfilling even after her marriage. Iam broken and helpless. Kindly help.

Ans: Here's a breakdown of your situation to help you decide whether to use the lump sum for a larger down payment or invest for future EMIs:

Factors to Consider:

Down Payment Impact: A larger down payment reduces your loan amount, leading to lower interest payments overall. This can save you a significant amount of money in the long run.

Investment Potential: Investing the lump sum could potentially generate returns that help cover future EMIs. However, market performance is not guaranteed.

Emergency Fund: Ensure you have a sufficient emergency fund after using the lump sum (ideally 3-6 months of living expenses).

Risk Tolerance: Investing the lump sum involves market risks. Consider your comfort level with potential fluctuations.

Here are two approaches to consider:

Option 1: Larger Down Payment:

Use a significant portion of the lump sum (say 40-50 lakhs) for a larger down payment. This can bring down your loan amount substantially, reducing your overall interest burden.
Invest the remaining amount (20-30 lakhs) to potentially generate additional income or create a buffer for future expenses.
Option 2: Invest and Pay EMIs:

Invest the entire lump sum (60 lakhs) in a diversified portfolio to potentially generate returns that can cover future EMIs.
This frees up your monthly income for other expenses or investments. However, market performance can impact returns.
Here are some additional thoughts:

Interest Rates: Compare current home loan interest rates with the potential returns you might expect from your investments.
Debt Management: Consider your overall debt situation. A larger down payment can improve your debt-to-income ratio, potentially making you eligible for better loan terms.
Professional Advice: Consulting a financial advisor can help you create a personalized plan considering your risk tolerance, financial goals, and investment horizon.
Here's a quick summary of your financial situation:

Strong Savings: With Rs. 40 lakh in MFs, Rs. 40 lakh in PF, and a Rs. 1 lakh monthly SIP, you have a solid savings foundation.
High Income: Your in-hand salary of Rs. 3.25 lakh per month provides significant financial flexibility.
House Purchase: Aiming for a Rs. 1.5 crore house indicates a long-term investment plan.

Ultimately, the decision should align with your risk tolerance, financial goals, and overall financial plan. Consulting with a Certified Financial Planner can provide personalized guidance tailored to your specific circumstances, helping you make informed decisions to achieve your objectives.

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