Factors to consider when planning your housing loan
Earnings
If you have a stable job in place, the lenders predict you can make your EMI payments on time. Thus, you can have higher EMIs. Initially, it may prove to be a costly affair, but in a few years, it may not seem a burden at all. If you do not have existing debt, lenders ask you to pay 40% of your income towards loans. If you sense you will earn a higher salary in the future in the form of hikes, bonuses, incentives, you can continue paying higher EMIs.Expenditures
While using the EMI calculator for housing loan, you must not just focus on current expenses but also future expenses. Your current and future spending could include family costs, medical fees, kids? expenses, lifestyle expenses, personal expenses, etc. Your EMIs should also remain unaffected by inflation rates. So, play safely when deciding your EMIs.The standard of living
Your lifestyle gets affected by EMIs.Every expense needs to be controlled as a large chunk of your income goes towards the EMIs.Loan tenure
If you can pay a huge chunk as EMIs in shorter tenure, then you have to divert a significant part of your salary towards it. However, if you are not comfortable with it, you can opt for 15 to 20 years of loan duration. If you are comfortable spending a portion of your income for decades, then opt for longer tenures and pay them slowly and steadily. Remember, longer tenure means lower interest rate and vice versa.Interest rates
Many prefer floating home loans than fixed ones. The latter is higher while the floating rates change depending on the market conditions and lenders. Thus, your EMI amount varies as the years go by. Therefore, you have to be prepared to shell out higher EMIs for some months.Source: Tax Guru
