Purchasing your dream home has to be one of the biggest purchases that a majority of us will make in a lifetime! What’s more, if you avail a housing loan to fund your home, you will pay it off for years and even decades.
But did you also know that there’s also an element such as spending a way too much on a Home Loan? Yes, if you do that, you may be left with little money to complete other goals in life such as overseas vacations, retirement, education and more!
That’ where it becomes a must to know of an amount which you should pay out of your monthly income towards a Housing Loan! A Housing Loan EMI calculator also helps in determining an amount that will go on a House Loan.
Let’s know more about monthly income that you should put on a housing loan.
Rule of Thumb
While it’s not mandatory to follow it, the general perception as per financial experts suggests that spending on Home Loans should not exceed 40% of your income. A majority of the lenders will compute this depending on your income size, stability, down payment size, Credit Score, and other factors.
The rule is not letting your lenders make you bite more than you can chew.
You should also crunch your numbers before you can even look for a Home Loan. That’s where using a Housing Loan EMI calculator can help you decide on a number that you pay.
Once you are aware of a Home Loan EMI number even before applying for a Home Loan, it can surely help you know how much you can afford or not! Doing this will also assist you in shortlisting your home purchasing alternatives.
How can You Crunch your Home Loan EMI Affordability Numbers?
You can do this by calculating your real expenses for every month. Get a pen and paper to note down your expenses. Don’t leave anything behind – small and big and analyse how much you can pay a Housing Loan EMI without disturbing other things.
It would be advisable to use an EMI calculator to determine your Home Loan EMI and the Home Loan interest rates that you would pay. Alternatively, also compare multiple loan interest rates from other lenders and opt for a deal that you can manage!
You should also take into account home insurance, stamp paper duties, property taxes, monthly maintenance fee (if you are buying an apartment) costs. Also, there will also be maintenance and repair costs involved as long as you live in a house.
The Bottom Line
Always remember that you should always settle for a Home Loan EMI that you could easily manage to pay without disturbing other financial goals of your life.
A majority of borrowers do not do this and regret by paying a major part of their salaries towards a Home Loan and are unable to channelize funds to other goals.
Hence, you should never commit this mistake especially when there is an online tool in the form of an EMI calculator is available to determine your affordability.
Don’t wait and keep assuming or indulge in crunching a suitable number for you!
Simply use an EMI calculator available free of cost at a leading lender’s website and figure out an EMI even before applying for a housing loan. Like this, you will approach your Home Loan with confidence and be credit ready! All the best!