Why people are afraid of taking home loan?
Every person’s dream is to have own house. However with increasing real estate prices, buying a house with own money may not possible. Several people buy a home by taking a home loan. However few people, including me are afraid of taking a home loan.
Why we are afraid of taking a home loan?
The basic problem everyone would be seeing when you think about taking a home loan is the EMI which we need to pay for 20 or 25 years. With the real estate prices going up, taking a loan of lacs of rupees and re-paying for such longer term would be a problem. When I expressed such feelings to one of my friend some time back, he expressed similar concern. Then I thought we are all travelling in the same boat.
How we can overcome this problem?
I own a small house. In 2011, I took a decision that I am going to buy my dream house in 2013. When I said dream house, it is not that I would purchase with Crores of rupees, but when I see it, it should come out clearly that I am going to live happily for my entire life.
People do not want to depend on salary income
One of the main reason, I felt people see problem in taking a home loan is that we are too much dependent on single income (salary or business income). What happens when such income stops? When I identified this issue, then I realized why I was afraid of.
What to do to change our mindset?
We should try to figure out the possible ways of solving it. I decided a year back to create a 2nd income, 3rd income etc., I want to create at least 2-3 alternative sources of incomes in the next 2-3 years.
Well, but what to do next?
Once I knew the problem, getting a solution was also a tough job. Every day when I get into my car in the morning, I used to ask myself “What can I do differently today which is going to change my life”. I do not want disturb my office timings, hence I used to restrict my thoughts outside office hours. I used to ask this question for almost 3-4 times a day and spend more than 1 hour on thinking process.
What solutions I found?
I found more than 10 solutions for the problem. Some of them were solutions to increase my returns on investments and some were to earn money through alternative ways by spending the time during weekend.
How to prepare a plan?
Prepare a plan preferably it should be a daily plan. Plan should include, how to earn more money, how to increase savings and where to invest your savings. Alternatively think of creating passive income opportunities. I was thinking that “I should not just look about earning money”, but “I should do something out of my interest and passion and that should provide me alternative incomes”. One of the solutions was creating this blog.
How to achieve the big goal?
Create smaller milestones on how to achieve your goal of buying a house. Measure each and every goal as you move on. When I prepared the goal in 2011, I created with almost each and every step on a piece of paper. I am modifying few steps as I go along and revising the plan.
Concluding thoughts: Like me, there are several people who are afraid of taking a home loan to buy their dream house. What I felt is create alternative incomes to increase self confidence. Look for possible savings and invest in best investment options. Create a plan today on how to achieve your goal in 2013.
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Suresh
Topic: Why people afraid of taking home loan?
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Hi Suresh,
i read articles written by you. those are veryhelp ful for others. Appriciated!! This is good job making articles with you analysis and experince.
i am just entered into this investiment world. i am software employee in INDIA. i wanted to know best ways to start saving money.Can you suggest me on plan.
i am thinking:
1. Taking a loans 2. Minimum investiments
Thank you for help…
Veeru , you should start investing thru your savings and not by taking loans. Since you are new to investment, my suggestion is to invest in balanced mutual funds to start with. 1) Invest in ICICI Balanced fund and HDFC Balanced fund. Keep some amount into recurring deposits also. 2) Once you are familar on how mutual funds operate, you can invest in large cap funds and diversified mutual funds. 3) If you can take some risk, you can invest in top 5 mid cap and small cap funds which I have recommended. But note that you should hold them for 8 to 10 years to get good returns. You can keep tracking every month on how your funds are progressing.