123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Real-Estate-and-Foreclosure >> View Article

Is Your Overpriced Home Purchasing Making You A Bonded Labour

Profile Picture
By Author: BK Vijay
Total Articles: 78
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

Purchasing a home is a huge investment. Many people who buy overpriced homes on loans become bonded labour as they suffer almost 20 years (240 months) paying EMIs (Equated Monthly Instalment) for their home loan.


During the past few years, urban population is increasing significantly. With the fast increase in urbanization, the demand for homes in urban areas has increased. The middle class people known for their ‘future thinking’ are actively buying homes. In this process, they are getting sucked, and becoming bonded labours paying back huge amounts due to overpricing of the realty sector.


Majority of middle class people purchase a home by taking loan from the banks and tend to choose a longer repayment tenure to avoid high EMIs. This makes them pay more than double the amount they have taken as a loan. The seller will be happy as he gets all the amount at once. It's the buyer who suffers by paying monthly instalments for a long period. By paying 1/3rd of his salary towards EMI, it becomes very difficult for a normal employee ...
... to get adjusted with the remaining salary.


Let us see the burden on the seller, by taking an example. Suppose, you have purchased a house and took a loan of 10 lakhs from a bank. Assuming interest rate to be 9.75%, you should pay Rs.9,486 EMI if you want to repay in 20 years. After 20 years, you would end up paying Rs.22,76,640. This is excluding processing fee and other charges. It clearly shows that you will be paying 2.2 times the amount you have taken as loan.


Assume you want to repay it in 10 years, then you have to pay Rs.13,078 EMI. But many people cannot afford to pay such huge amount every month towards home loan alone. An average employee in a decent company, today, gets around 15,000 to Rs.20,000 per month. If he spends around 10,000 per month just to repay the loan he has to struggle with the remaining amount of his salary for next ‘ten years’.


The case is worse when you take a flat in an apartment. By the time you finish your instalments, your home will have significant cracks on it. Not even two generations can live in the same apartment that you have bought with your hard-earned money.


So, think twice before investing your hard-earned money in a home. Especially when you are buying it on loan, you are not just investing money, you are giving a commitment for the next twenty 10 or 20 years.


Real Estate section in Hyderabad-india-online.com (HIOC), provides informative and useful articles on various categories such as real estate guidance, assessing quality of construction, vaastu, real estate – major developments and opinions. Real estate section is especially helpful for people who are looking for information on general analysis, construction, government use, taxes and other Hyderabad real estate related activities.

Total Views: 482Word Count: 477See All articles From Author

Add Comment

Real Estate and Foreclosure Articles

1. Lavender – Elegant Homes For Modern Families
Author: Dishant

2. Discover Your Dream Property: Edmonton Homes For Sale
Author: Haupt Realty

3. Ace Divino: A Premier Destination For Relaxation
Author: Invest Mango

4. Aipl Joy District: A Premier Commercial Hub In Sector 88, Gurgaon
Author: AIPL Joy District

5. M3m Capital’s Fitness And Wellness Amenities: A Healthier Lifestyle
Author: Khushi Singh

6. Flats For Rent In Phase -9 Mohali
Author: Ravinder Kumar

7. Flat For Rent In Pancham Society
Author: Ravinder Kumar

8. Write For Us-nirwana Estate
Author: Ravinder Kumar

9. Flat For Rent In Gobind Apartment
Author: Ravinder Kumar

10. Real Estate Agent Akash Singh
Author: Ravinder Kumar

11. Real Estate Prices Fall In Mohali
Author: Ravinder Kumar

12. Property Maintenance And Repair Management In Bahrain's Rental Market
Author: Hannan

13. Total Environment Jakkur
Author: Total Environment

14. Redefining Spaces: The Role Of Architects In Dehradun With Heritage Architects
Author: Heritage Architects

15. Dholera Solar Park: Shaping The Future Of Clean Energy In India
Author: Tatvam Dholera SIR

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: