How much salary should buy a new house? Read the calculation of EMI

Everyone has a dream to have their own house. There is an emotional angle attached to the house in India. For this, people first buy a house and building after starting a job. This trend is going on in metro cities. In recent years, this has become possible because people are getting home loans quickly. Savings for a down payment or taking help from household members. In fact, these days there is a lot of discussion about whether to buy a house or not. Are there any benefits to renting? Actually, buying a house or renting, both decisions depend on your income. If you decide according to income and need, you will not have to think financially.

Reconciliation between salary and EMI required

The first question that arises is when should you buy a house? The answer to this is how much is the house and how much is your salary. The simple formula is that the home loan installment should be a maximum of 20 to 25 percent of your salary. For example, if your monthly salary is Rs 1 lakh, you can easily pay an EMI of Rs 25,000 per month.

But if the salary is between fifty to seventeen thousand rupees and you have bought a house by taking a home loan, then its monthly installment is twenty five thousand rupees, then financially this decision can prove to be wrong. Because it can take a long time to pay off the home loan, at least 20 years. However, it is wrong to think that one should not buy a house. If 25 percent of the salary becomes the loan installment, then a house should be bought out of necessity. If your salary is between 50 to 70 thousand and the EMI of the house is less than 20 thousand rupees, then you can buy a house. So you can buy a house up to 25 lakh rupees whose EMI will be less than 20 thousand for 20 years.

If the salary is less than one lakh rupees and the price of the house is more than 30 lakh rupees, then it will be a profitable deal for those with a salary of 50 to 70 thousand to stay on rent. In the meantime, focus on saving and when the salary reaches around one lakh rupees per month, you can buy a house by paying more down payment. The higher the down payment, the lower the EMI. Financially, it is considered that someone's salary is one lakh rupees, then you can take a decision of 30 to 35 lakh rupees. On the other hand, if the monthly salary is one and a half lakh rupees, it will be suitable for them for a house budget of up to 50 lakh rupees. So, in any case, only 25 percent of the salary should be paid for the home loan.

Decide on career growth

Besides, everyone should make informed decisions according to their needs. What do you work ? What is your job profile? Decisions should be taken based on that. If you take the first house, you will be limited to one city. Most of the people shift from one city to another in the initial period due to career growth. However, people are not in a position to change jobs if they buy a house before a job. Because moving to a new city and staying on rent and then renting out one's house is not considered appropriate. Also, if you don't have a secure job, then don't buy a house in a hurry.

Choosing the right location is essential

If you have decided to buy a house then choose the property properly. If you want to buy a flat, buy it in a location where the rent is good. With this, the price of flats increases by eight to ten percent annually. So the price of the flat will increase due to inflation and when the home loan is repaid i.e. after 20 years the current price of the flat should be at least three times compared to the purchase price.

Significantly, some people buy houses and cars along with their first job and burden themselves with EMIs, which later turns out to be a completely wrong decision. So take decision as per need. If you make decisions based on earnings, you may face financial difficulties. Another thing is that if you start saving along with your first job, you can relax about retirement at the age of 40.