Publication details: Property Hotline – MB Now – 22-09-2016

Responses, opinion and view from Kartik Jhaveri

Question sent by Ankur:-

I have Rs. 45 lakhs that I got from the sale of a property. I also have a home loan of Rs. 36 lakhs on another 3 BHK property located in Ghaziabad. The flat is ready for possession. Will it be a good idea to use the Rs. 45 lakhs to repay the home loan?

Advice given:

  1. Existing loan gives you tax benefits… Hence continue, provided you are comfortable servicing the EMIs.
  2. Instead of using this money to prepay the home loan, invest this money in wealth creating assets like equity mutual funds.
    • Money doubles about every 5 years.
    • In about 5-10 years you will be able accumulate a corpus which will pretty much help you pay off your loan and also reimburse you the interest that you have paid off. Hence property become free.
  3. Alternatively you can even invest the money conservatively (at about 9-10% p.a.) which will help you earn about Rs. 4-4.5 lakhs a year. You can use this money to service your EMIs.

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