Thread by @KesariDhwaj

@pratyasharath 1. Buying a house for self use is not an investment.
2. Because unless you're in dire circumstances, you won't be selling or mortgaging it.
3. Plus, its a illiquid asset and can't be monetized easily.
4. Before buying a house, please check EMI is what % of your household income+

@pratyasharath +
5. Theoretically, if EMI is 30% of less of your HH income, you can buy a house.
6. Plus, in an ideal scenario, your HH income should increase and EMI as % of HH income will fall.
7. But ask yourself this - what is the kind of pressure EMI payment will have on other activities+

@pratyasharath + Travel, leisure, eating-out, kids education (can you send your kids in future to desired school) and most important of them all, impact on Saving!
8. Because you'll get 80% loan and 20% has to come from your pocket.
9. Even a standard Rs 50L house will require you to put up+

@pratyasharath + Rs 10 L from your pocket, not to mention addition 3%-5% on stamp duty and registration charges.
10. You'll most probably end-up exhausting all your savings, and might even has to take assistance from your respective families.
11. So, you'll be down to ZERO saving, and a 15 yrs+

@pratyasharath + EMI commitment.
12. So, sit down, ask yourself these questions -
- Are you ready for this commitment?
- Does it require that both of you have to work to afford the house?
- Because if it does, then forget about breaks or pursuing some other interests.
- Monthly income will +

@pratyasharath + be your only priority.
- Do a stress test: What is one of you looses your job? Can you service the requirement?
13. Plus, what do you think will be your projected income (considering your field of work) over next 5 and 10 years.
14. Because this will tell you by what extent +

@pratyasharath + will EMI go down as % of your income.
15. And tell you, how much can you save, and spare for other activities.
16. The best argument to buy a house is when there is not much difference between your monthly rent and projected EMI.
17. So, if your rent is Rs 25,000 and projected+

@pratyasharath + EMI is Rs 45,000, then ask yourself this - can you afford this additional Rs 20,000 burden?
18. In my case for example, rent of the house that I live in is only Rs 24,000 but if I were to buy this very house, my EMI would be in the range of Rs 65,000-70,000.
19. So, I can't +

@pratyasharath + afford to buy the house, that I ideally need in terms of size and rooms!
20. To be able to afford a house of similar size/rooms, I'll have to go to other locality. Are you OK with that?
Final word - its a long term commitment, will place strain on your finances, which will +

@pratyasharath + impact other activities, and aspirations, and have emotional/physiological cost as well.
- Are you ready?
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