Penny wise , Pound foolish

One of my friend is a very alert guy when it comes to handling finances. He always goes for a bargain buy ( even for vegetables), plans his tax on time and so on. But when it comes to a buying a home, he was not that prudent . This is the mistake that most of middle class makes. he booked a flat almost to years ago with a reputed builder in Bangalore and still waiting for a day to get the possession. He keeps paying his EMI and has lost already lot of money in terms of the rent he is paying and pre-EMI interest for which he cannot claim tax benefit.
Although, the builder has been postponing the dates nobody has ever dared to sue the builder. This is a typical scene where one prudently saves everywhere and looses out in a big way in buying a liability ( yes!! your first residence is going to be a liability..If you don't agree , I am fine).
In this context found two great posts on some fellow bloggers post wrt buying homes. They are a must read , if you are planning to buy an house.
I sincerely acknowledge the great articles by these bloggers.

Simple Indian Food ^^^^^Microwave food ^^^^^^^^^^Easy crafts

2 comments:

Raag Vamdatt said...

I agree that paying installments before taking possession of the house can be painful - especially because you would also be paying rent for your current residence.

But there are tax benefits available even for such payments - The pre-EMI interest that is paid for partially disbursed home loan can be claimed in 5 equal installments in 5 years subsequent to taking the possession of the house. So, although delayed, there is a tax benefit available...

Sunil Ramachandran said...

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