No this has got anything to do with my wanderlust nature. For that matter, if I ever thought in these lines, my choice would have been pretty simple. I prefer to float. Fixed is not my thing.
But if life’s philosophy by any chance is guided by home loans, I guess I may never float. Think about this. I was a happy-go- lucky guy who was peacefully staying in rented houses. Lived in 13 houses in 13 years! My job was the primary reason, but then staying in a rented place gave me the flexibility. I coolly answered that I am mobile. Since I never had the worry of renting my own house, adjust in a new place blah blah. And every time it was a change too. A little bit of an expense here and there in changing furnishings, but nonetheless a welcome change from the faded window screens and curtains that you convince yourself to live with in your own house. And in a way rented houses helped fueling my imagination about what my own house could be. And always stay optimistic that one day life is going to be great.
Then all of a sudden all this changed. One day I ended up seeing an advertisement that offered 110% loan for homes. Now that was my kind of loan. With just about 60 bucks in the pocket and a sizeable credit card loan, owning a house was a pipedream to me. And whenever that fancy occurred to me, I was brutally tossed away by the realities of real estate markets. 30% black money and in the balance 70%, you can get a loan for only 75% of that amount. In effect I needed to have atleast 45% plus of the property cost as my own funds. This was possible, only if any Nigerian royalty bequeaths his estate to me like it is claimed in the spam emails. So, I gave up my dream as soon as it cropped up.
And this 110% thing brought some real hope. I thought that maybe that Nigerian royalty has reincarnated as a Marketing Manager in IDBI bank. Jumped at the offer and mind you, my payslip was really respectful to fetch me a handsome loan. That is because payslips are not bank statements and they don’t tell the story of your credit-worthiness. Once I got the loan sanctioned, I started hunting for a house and found a real dream house which was just about 30% above my budget. Well it is a different story that I stayed dreaming big and eventually managed to buy the same property with 60 bucks in my hand, with a kindhearted friend buying tea for all the folks who turned up in the registrar’s office.
The bankers were also present to handover the first installment cheque to the builder. And in the melee, I don’t remember what I signed on. Not that I was an expert that on carefully reading the loan document, I would have taken a learned decision. My knowledge in money matters doesn’t really matter at all. My child can give me a lesson or two. ( OK, this was an exaggeration, being my child she also is zilch in that. Maybe some other child would be better ). Apparently I had chosen a Floating Interest rate.
That’s where the trouble is now. Things were ok for a couple of years and one fine day I got a missive from my bankers. They kindly asked me to make a part prepayment of the loan to retain the EMI amount and period as such. Couple of year’s progress only meant that instead of 60 bucks in my hand, I now had some 180 bucks in hand. And 180 bucks was not considered as part prepayment by my bankers. I took their alternate suggestion and increased my EMI amount by about 10%. Then life returned again to normalcy.
But then bankers are a different tribe. They will first allot sub prime loans, meaning they will provide loans what you don’t deserve and then come back at you heavily. I don’t know what kind of a honesty that is. So they started again. This time around though they knew I would be incapable of making part prepayment, what with the qualifying criteria for the amount not changing. So unilaterally they have just decided and informed me that my loan tenure has been extended by just another 13 years. I initially was overwhelmed with their best wishes of me living for another 13 more years than scheduled.
But then it pisses me off also. I was a happy-go-lucky guy. Didn’t I tell you that? Now I am worried. I don’t know whether my children will inherit the home or the loan. And I am also cursing myself for not being smart to choose a fixed interest rate. I don’t know when this ordeal will get over. I am certain that in another 2 years I will get one more letter stating that my tenure is now 120 years and I should nominate my grandson for repaying the loan.
One saving grace is that, they say that not a single bank offers a true-blue fixed rate and always retains the authority to change the interest rates as it deem to be. And 90% of the loaned population floats. Irrespective of whether they have read the fine print
Afterall I am an intelligent guy and I know I would not make a mistake. A dream penthouse with a 140 year loan tenure is not easy picking ok ?
But if life’s philosophy by any chance is guided by home loans, I guess I may never float. Think about this. I was a happy-go- lucky guy who was peacefully staying in rented houses. Lived in 13 houses in 13 years! My job was the primary reason, but then staying in a rented place gave me the flexibility. I coolly answered that I am mobile. Since I never had the worry of renting my own house, adjust in a new place blah blah. And every time it was a change too. A little bit of an expense here and there in changing furnishings, but nonetheless a welcome change from the faded window screens and curtains that you convince yourself to live with in your own house. And in a way rented houses helped fueling my imagination about what my own house could be. And always stay optimistic that one day life is going to be great.
Then all of a sudden all this changed. One day I ended up seeing an advertisement that offered 110% loan for homes. Now that was my kind of loan. With just about 60 bucks in the pocket and a sizeable credit card loan, owning a house was a pipedream to me. And whenever that fancy occurred to me, I was brutally tossed away by the realities of real estate markets. 30% black money and in the balance 70%, you can get a loan for only 75% of that amount. In effect I needed to have atleast 45% plus of the property cost as my own funds. This was possible, only if any Nigerian royalty bequeaths his estate to me like it is claimed in the spam emails. So, I gave up my dream as soon as it cropped up.
And this 110% thing brought some real hope. I thought that maybe that Nigerian royalty has reincarnated as a Marketing Manager in IDBI bank. Jumped at the offer and mind you, my payslip was really respectful to fetch me a handsome loan. That is because payslips are not bank statements and they don’t tell the story of your credit-worthiness. Once I got the loan sanctioned, I started hunting for a house and found a real dream house which was just about 30% above my budget. Well it is a different story that I stayed dreaming big and eventually managed to buy the same property with 60 bucks in my hand, with a kindhearted friend buying tea for all the folks who turned up in the registrar’s office.
The bankers were also present to handover the first installment cheque to the builder. And in the melee, I don’t remember what I signed on. Not that I was an expert that on carefully reading the loan document, I would have taken a learned decision. My knowledge in money matters doesn’t really matter at all. My child can give me a lesson or two. ( OK, this was an exaggeration, being my child she also is zilch in that. Maybe some other child would be better ). Apparently I had chosen a Floating Interest rate.
That’s where the trouble is now. Things were ok for a couple of years and one fine day I got a missive from my bankers. They kindly asked me to make a part prepayment of the loan to retain the EMI amount and period as such. Couple of year’s progress only meant that instead of 60 bucks in my hand, I now had some 180 bucks in hand. And 180 bucks was not considered as part prepayment by my bankers. I took their alternate suggestion and increased my EMI amount by about 10%. Then life returned again to normalcy.
But then bankers are a different tribe. They will first allot sub prime loans, meaning they will provide loans what you don’t deserve and then come back at you heavily. I don’t know what kind of a honesty that is. So they started again. This time around though they knew I would be incapable of making part prepayment, what with the qualifying criteria for the amount not changing. So unilaterally they have just decided and informed me that my loan tenure has been extended by just another 13 years. I initially was overwhelmed with their best wishes of me living for another 13 more years than scheduled.
But then it pisses me off also. I was a happy-go-lucky guy. Didn’t I tell you that? Now I am worried. I don’t know whether my children will inherit the home or the loan. And I am also cursing myself for not being smart to choose a fixed interest rate. I don’t know when this ordeal will get over. I am certain that in another 2 years I will get one more letter stating that my tenure is now 120 years and I should nominate my grandson for repaying the loan.
One saving grace is that, they say that not a single bank offers a true-blue fixed rate and always retains the authority to change the interest rates as it deem to be. And 90% of the loaned population floats. Irrespective of whether they have read the fine print
Afterall I am an intelligent guy and I know I would not make a mistake. A dream penthouse with a 140 year loan tenure is not easy picking ok ?
3 comments:
once again, thanx for the tips and the "home" truths. You have surely driven "home" the point to aspiring home-runners
Thanks,was not thinking to Buy one as the payslip #@%^,But when ever will buy one will always remember the tips.
Anshu
all are " home-ward bound" while you seem to be bound by the "bonds of loan"
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