Buying A Second Home vs Repaying The Present Home Loan
Chapter #7 of Digital Loan Series by WhatsLoan (powered by DigiMusk)
You have come a long way through all our chapters. And, we see there is a lot more to learn, to share and to clarify. In this chapter #7, we are focusing on the pros and cons of buying a second home while you’re still repaying the present home loan.
People who are well aware about the real estate industry and know how to capitalize one home after the other and these people often plan a better way. But people who are still new to this whole game do find certain misconceptions.
When Should You Buy A Home? 10 Point Checklist For Your Timeline
Chapter #4 of Digital Loan Series by WhatsLoan (powered by DigiMusk)
We are here to clear it out and guide you with all best possible options. You may think of buying a second home if you have got good bonus, or have got a new client payment, or have got a good pending payment. But what if you already have a running home loan? What all should you calculate before to choose your best option?
10 Common NRI Home Loan Myths Demystified
Chapter #6 of Digital Loan Series by WhatsLoan (powered by DigiMusk)
Don’t Buy The Second Home:
1. If you are paying heavy interest on your present home loan
If yes, there is no point in multiplying your payments. You should better clear off your debts in such a case.
2. If you are following Pre-EMI payments and not the EMI payment
Pre-EMI payments allows you to pay only the interest and thus end up doubling your cost of property. EMI payments allows you to pay for the interest as well as the principal amount. In such a case, consider paying off whatever you can and reduce your pre-emi.
3. If you are on a flexible rate of interest and the interest rate is increasing
Opt-in for repaying maximum of your present home loan. Or, you can also consider switching to another home loan scheme where you can find lower interest rate.
Buy A Second Home If Any Of The Following Is True
1. If your home loan is under subsidy scheme from your builder
If this is the case, ignore paying the interest till you have this provision. If you are paying the interest which is due on any third party, you are not helping yourself. Instead use that money to buy a second home.
2. If you are buying a ready to move in house
This will help you in generating revenues from the first day if you put it on rent or help you in paying off your EMI through rent. It will also help you if you move in immediately and stop paying your present rent expense.
3. If you have sufficient planned money for this house
If you are again opting in for a second home loan to consider this house, then re-calculate your financial goals for next 5 years. And, if you have planned well, then go ahead.
Digital Loan Series
- Chapter #1. 10 Personal Things Banks Ask You While Determining Your Home Loan
- Chapter #2. 5 Necessary Documents For Your Home Loan Application
- Chapter #3. 20 Additional Hidden Charges On Your Home Loan That You Must Know
- Chapter #4. When Should You Buy A Home? 10 Point Checklist For Your Timeline
- Chapter #5. 5 Most Simple Ways You Can Pay Off Your Home Loan Sooner
- Chapter #6. 10 Common NRI Home Loan Myths Demystified
By the way, do you know that we have built a Digital Loan Key, a unique financial identifier, that can retrieve your legacy documents (such as your Aadhaar card, pan card, bureau score, 10th mark sheets, birth certificate) online and enables you to get it verified within minutes and share with the lenders in one click.
Digital Loan Key
We have launched it for the builders and we’re launching it soon for you. Sign up below to get it first.
The mission of this Digital Loan Series is to educate you and make you ready for the loan anytime!
If you happen to read this article, we assume you are somewhere in between of thinking for borrowing/purchasing a house. We recommend you to follow the series, or if you have any immediate query, reach out to us at email@example.com.
We also recommend you to share this with your people, your network, and younger ones so that they can be loan ready for the right time!
Signing off (till we write the next chapter to you on next Wednesday)