#preclosure

Closure of Insta Loans in HDFC | Pre-closure procedure and charges applicable.

To own a home is life's very objective for many. Often equated with things like sense of security and social reputation, buying a home, is also seen as a symbol of financial stability, which comes to aid in times of emergency when the home can be pledged for a loan or sold. On the other hand, rented houses often get equated to temporary nests, which the residents may have to leave anytime, to flock to another. The moment someone says, "I'm living in a rented house." The next question the person would hear is, "What's the rent?" followed by, "Why don't you pay that money as an EMI and buy a home?". It may come as a sincere advice from well-wishers or from others who ritualistically advocate this idea to anyone they see.

Even among relatives, the one who is living in a rented house, is often confronted with the question, "So, when are you going to buy a house?". It's similar to eligible bachelors getting targeted with the question, "When are you going to get married and settle down?". Perhaps to avoid sounding disrespectful, no one shoots this question back: "You are married. Do you feel settled down?". The truth is no one ever settles down. Life flows like a river. We may feel the turbulence of life easing at some places and getting aggressive at yet other places. Unfortunately, a lot of people give in to the pressures from family, peers and the society. They take the financial decision of buying a home based on an emotional overdrive, without making a realistic assessment of their financial health, especially when the push comes from within the family - from parents, spouse or children.

Today we see many young to middle-aged individuals, committing themselves to strict financial targets within their limited budget to buy their dream home. And finally, they may decide to do so, keeping home loans in mind. As for the banks, home buyers are just potential customers, same with realtors and property developers. For them selling a property is a business. Gifts, discounts, visuals, and narratives are part of their promotional strategy to lure a potential buyer. Now, it's the buyer who has to think and decide rationally. If he/she decides without foreseeing the financial consequence of the decision, the person may have to stay prepared to face what may come as a surprise or shocker time-to-time. Buying a home can turn out to be a boon or a nightmare based on the circumstances one may have to handle. But a heart that is smitten by desire will always resist seeing the ill-side of the object it desires.  

Youthful years do not come back. Ideally, those are the years one can use for building a career. If these years are lost in the compulsion of buying a home, and in jumping jobs to pay monthly EMIs towards home loans, where would one get a free mind and time to pursue an independent career? For newly married couples and parents of young children, early years of their lives are precious moments of life to be spent in building the bonds of the family and for the upbringing of children. An internal financial strife could ruin the tranquility of the household. The desire to live in an own house could also displace people from areas to which they have a sense of familiarity when they opt for moving to the outskirts of the city property considering lower property costs. But then, the decision could increase everyday commuting for both children and parents. Elders in the family could feel restricted to their new localities, unlike their former areas where they could independently avail amenities they need and reach out to relatives and friends. In all, distance to commute, the time consumed and resources spent cumulatively could outlive the benefits of owning a home.

In cases where only one person in the family is an earning member, a home loan without a proper backup plan could end up as a serious risk. If the sole breadwinner's income gets delayed or suspended even for a month or two, due to hiccups in the job or due to health reasons, the burden of the home loan can put the whole family in an unexpected crisis and shatter its peaceful life. Banks would start mounting pressure. Late fee and penalties, even interests on them could swell up the dues. In a worst case scenario, due to an unintentional lapse, a naive household could end up facing complex situations, rash treatment by collection agents and even eviction. Every home buyer may not end up facing these situations, but those who make a premature decision to buy a home will certainly do. Financial risk on a deficit wealth can turn out be a bad deal. Instead, the right way would be to plan for home years in advance and work towards it gradually and systematically. Saving is a greater virtue than availing a loan. One needn't compromise on the prime time of life, which could otherwise be used to build a career and work towards the betterment of every member of the family. One needn't compromise on the choice of place either. Choosing to live in a rented property in an area where the family is accustomed to, is more sensible than migrating to a disconnected place. Elders in the family will not lose their sense of independence nor will they feel displaced from their comfort zones at an age when comfort means a lot.

“Many build a house but never reside in them peacefully. If they had chosen life as the priority, their destiny would have been different; they would have achieved a lot more than what their physical property failed to achieve.”

Article by Ajay Kumar Jagadeesh