The decision to buy your first home for living in it or to continue staying in a rental accommodation depends on several factors.
1. You need to analyse whether you are ready to live in the same place for at least 10-15 years during your prime regular earning years.
2. If so, you can look around for a ready-to-move house to buy, otherwise it will be better to rent.
3. Buy only if you can afford the additional monthly burden of home loan interest rates, with all types of loan repayments not exceeding 50% of your monthly carry-home pay, and also which you can fully repay before your retirement, to spend a debt-free retired life.
4. If you are not sure of the house you want to buy, it will be better to rent while you evaluate your options before making a big financial commitment.
5. If you may be required to move at a short notice, and do not want to be stuck with EMIs for an empty house upon your transfer, it is better to stay in a rented accommodation.
6. If you don’t have funds for a down payment, it is better to rent and save a big sum that can be used as down payment than to take a large home loan.
7. If the house costs more than twice your annual household income, chances are you can’t afford it and you would be better off on rent till the situation changes.
8. Stick to rentals if you can’t afford the upkeep of a home as buying a house requires an ample emergency fund.
9. Ideally, you should buy a house to actually live in it during your retirement, which means around 20 years+, and this would also help you decide its location too.
10. If all the above is insufficient to reach a decision, you would be better off investing your hard-earned money in a Balanced MF SIPs during your earning years, to accumulate 25 times your estimated annual retirement expenses, and then withdraw 4-5% of the corpus annually through monthly SWPs perpetually, while continuing to spend a peaceful retired life in a rental accommodation.
1. You need to analyse whether you are ready to live in the same place for at least 10-15 years during your prime regular earning years.
2. If so, you can look around for a ready-to-move house to buy, otherwise it will be better to rent.
3. Buy only if you can afford the additional monthly burden of home loan interest rates, with all types of loan repayments not exceeding 50% of your monthly carry-home pay, and also which you can fully repay before your retirement, to spend a debt-free retired life.
4. If you are not sure of the house you want to buy, it will be better to rent while you evaluate your options before making a big financial commitment.
5. If you may be required to move at a short notice, and do not want to be stuck with EMIs for an empty house upon your transfer, it is better to stay in a rented accommodation.
6. If you don’t have funds for a down payment, it is better to rent and save a big sum that can be used as down payment than to take a large home loan.
7. If the house costs more than twice your annual household income, chances are you can’t afford it and you would be better off on rent till the situation changes.
8. Stick to rentals if you can’t afford the upkeep of a home as buying a house requires an ample emergency fund.
9. Ideally, you should buy a house to actually live in it during your retirement, which means around 20 years+, and this would also help you decide its location too.
10. If all the above is insufficient to reach a decision, you would be better off investing your hard-earned money in a Balanced MF SIPs during your earning years, to accumulate 25 times your estimated annual retirement expenses, and then withdraw 4-5% of the corpus annually through monthly SWPs perpetually, while continuing to spend a peaceful retired life in a rental accommodation.