Hi,
I am a salaried person in my early 40s and in the highest tax bracket. I do not have any home loan currently. I bought a second property for investment recently and already paid about 75% of the amount using my own funds. I have arranged for the remaining 25% of the money from my personal funds but I am in dilemma whether to pay the money that I have or invest that money somewhere and take a home loan for paying the 25% balance amount.What is the wise option here in terms of the gains ?
I already have other avenues (PPF etc) for claiming the 1.5L tax rebate as per 80C, so saving tax on the principle of the home loan is not going to help me. Thanks Srinivas
4 Answers
Dear Srinivas,
Have you planned and invested/investing for your other financial goal(s). Do you have a plan for your retirement goal? Kindly share details about your Financial Goals.
Hi Sreekanth, Yes, I have planned (separate allocations) for my goals and retirement. For simplicity, lets just consider the benefits of going for a home loan vs returns on investing the money in hand in today's scenario. Assuming that I am looking for a home loan of 20L for a period of 5 years and I want the risk to be low or moderate for my investment, will I gain by making a lump-sum payment for the property or by going for the loan ? Thanks Srinivas
Dear Srinivas,
Considering current interest rate scenario, purpose (the property is for investment) and your time-frame, I believe that it might be prudent to take home loan for Rs 20 L and invest the lump sum in other investment avenues as per your financial goals.
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