After ten years of renting a house, Ngoc Bich (from Thai Binh ) and her husband saved 800 million VND. Her family plans to buy an apartment worth about 2 billion VND. Meanwhile, the total income of the couple is 30 million VND/month and they have a small child.
Thus, she has to borrow up to 1.2 billion VND to be able to buy a house. She is wondering about her financial plan to buy her first house while ensuring monthly expenses and debt repayment.
Ms. Nguyen Thi Thuy Chi, personal financial planning expert, FIDT Investment Consulting and Asset Management JSC, gave advice to Ms. Bich.
Sharing with VietNamNet reporter, Ms. Chi said that because she did not know her age, job, income stability, monthly expenses, other assets, other debt situation of Ms. Bich's family... the expert will focus on the aspect of saving to pay off the loan and risk management when borrowing.
For a young family with a small child like Ms. Bich's family, with an income of about 30 million VND/month, the best savings level to ensure both achieving financial goals and meeting living expenses will be about 30 - 40% of income.
Each month, Ms. Bich's family needs to save from 9 to 12 million VND. Saving 12 million VND/month requires a lot of family discipline.
Ms. Chi analyzed that, assuming Ms. Bich borrowed at an interest rate of only 8%/year, with a loan term of 25 years, the monthly principal and interest payment would be 12 million VND/month in the first years of the loan.
Using 100% of your monthly savings to pay the bank will leave you with no "elastic" reserve for cases of interest rate fluctuations, changes in life that cause increased expenses, and no opportunity to invest in other assets... This is very risky for your family.
In addition, with a monthly loan repayment rate higher than 30% of income, you will be at risk if there are problems at work or for some other reason your income decreases.
In terms of a comprehensive personal financial picture, Ms. Bich also needs to consider financial needs such as giving money to both parents, planning to have a second baby, or even money to buy furniture and appliances when moving from a rented house to a house owned by her... Or financial reserve needs such as having a reserve fund or life insurance?
With all the above factors, Ms. Chi advised Ms. Bich and her husband to wait for a while to save more, or choose an apartment with a lower value if possible, and possibly buy a house for around 1.5 billion VND.
In case the housing need is too urgent for your family and the price of 2 billion VND is the minimum that you and your husband can accept, you must make sure to prepare all the above backup plans before borrowing.
In particular, one factor that Ms. Bich must ensure is the ability of the couple's income to grow in the future. If the income has the potential to increase by about 10% - 20% in the next 1 - 2 years, the risk of the couple borrowing from the bank will be balanced.
Source
Comment (0)