The Dream Home. Dream or Reality?
Home is where the heart is. Heart is where the home is. And what is home, to be precise, in this reference? Your native land? Where you hail from? Or, your house? Made of bricks, cement and sand.
But we should know that a rented house isn’t and never will be what we can call our own house. No matter how extravagant and clean and cozy and comfortable comfortable a rented house is, it can never be as homely as one’s own house, a home, one can call their own.
Then, what is keeping the gap between us and the dream home?
As much as we earn it never really is enough , not even enough for our survival and day to day needs. ( Or so, we , at least refer to think).
Then, if we can’t earn as much amount of money to buy a dream house, do we live without it? No. We use a home loan.
A home loan , you say?!
That will cost all ones earnings!
Is not that the truth (or common myth) that we mostly are petrified and terrified of?
Well not to worry.
Home loans these days are becoming more and more affordable and convenient , thanks to new and a variety of incentives and various schemes offered by banks and banking institutions.
Lets look at a comparison of how to repay and dispose off a home loan debt quicker and easily.
The comparison and discussion of SIP vs EMI is outlined below with and illustrated in this article.
The SIP approach has not taken inflation or taxation into account. Certain items, such as cars or gadgets, could become costlier if one waits for a period of over 1-2 years.
If one buys a product or service, in this case, avails of a home loan from any bank or banking institution, via EMIs (equated monthly instalments), they t will thus be paying more than the actual price. However, if one saves this sum through SIPs in mutual funds, they will be shelling out less than the sticker price.
A detailed comparison of the two options , is outlined and illustrated and explained below with :-
1) The SIP option does not work for all assets, only discretionary purchases. It does not make sense to wait for 6-9 months to buy a fridge or a laptop. Though in the case of a home loan, it is sensible to go and opt for an SIP option.
2) The EMI option is costlier, but you also get to use the asset immediately. It is better to buy certain items, such as a treadmill or your first car, when you need it. Though for the the home loan, which is a matter of great discussion and some time, it is better to go for an SIP.Click here to read about Calculate your home loan Eligibility
4) Some expenses, such as the fees for an MBA, cannot be postponed. The SIP option can work only if you plan well and start saving 2-3 years in advance. Hence, an EMI is better for this option.
5) EMIs have been calculated on the base amount. There could be additional charges. However, the self-employed can claim tax deduction on interest if it is used for work.
Now a days young generation of our country is more interested in EMI i.e. Equated Monthly Installment over SIP (Systematic Investment Plan) or regular savings. This tendency has been increased due to many and and various E commerce portals.
Credit cards have added fuel to this tendency. In a office floor with a capacity of 500 persons you can easily see at least 50 new mobiles or some other electronic items are coming from Flipkart, amazon etc. They are more interested to buy it on offer even if they don’t require it. Hence ,EMIs are very much availed even though there is really no need to avail of an EMI.
In addition to the above, home loans , consumer durable loans and personal loans are adding burdens to the youth for their status war with their peers.
One should spend as per their requirement. Therefore, one should definitely not and rather, not at all go by the offer and try saving at least ten percent of their net income in the regular savings scheme like equity SIP or recurring deposit.
In the case of home loans, and the relevant case in our context and and concern, we thus conclude, that it is better to opt for the SIP plan in order for a simpler and less hassle filled home loan process.
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