Thread: Level of Leverage

Level of Leverage: Just getting hold of a property is not enough in judging whether to take personal home finance. It is important to see to what extent the cost of the property is financed. Generally housing finance companies finance 80-85% of the property value. In that case the individual opting for the personal home finance should bear a 10-15% down payment and certain fixed costs like the following:

1. Processing and administrative fee.
2. Legal fees
3. Stamp duty charges
4. Property insurance premium
5. Accident insurance premium
In order to meet all these payments a liquid asset base is important.

Tenure of personal home finance: Personal home loans are offered for a period of 15 years, which may shoot up to 20 years in some cases. Long-term loans are accompanied by small monthly payments but high interest rates. So individuals with low monthly salaries can go for long term personal home finance but at some cost.

Here's the full version : Personal Home Finance.

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