Would like to discuss my financial condition here so that you guys can share your thoughts. TLDR :). There are some details related to family as well, which I think is important while taking financial decisions.
In 2016 I have purchased a small piece of land (31*40 ----> 138 square yards - corner plot) in a gated community in Medchal - Hyderabad for 11,00,000 INR. Now its value has more than doubled due to the fact that it is closer to National Highway, HMDA authority approved property. But the problem is no one has constructed any house there till now. Almost 167 acres of empty land and everyone waiting for others to start house construction, so that they can also start or sell at higher value. This property was bought with the help of my father but registered in my name.
I wanted to give my parents a happy life in their old age and piece of mind by letting them stay in an own house. In 2017 I got married and in 2018, I took a decision to buy an 2 BHK apartment in Hyderabad city itself where Metro rail is closer and a gated community. As my father, mother, wife, kid and myself all were staying together and my father used to give his monthly pension of 40,000 INR to me to maintain the family and I used to get 90,000 INR (Total 130,000 INR per month family income), I have purchased a property for 58,00,000 INR with a home loan of 43,00,000 (15 years). My wife and her parents helped me at that time - we wanted not to take money from them as it was a new relationship. But, still my wife insisted me to take money that they are offering as taking personal loan and home loan is not advisable. My savings were zero till then.
The only reason why I wanted to take a big loan and purchase a first house is that my father was 63 years then and he was getting government pension. I work for an IT company but in IT companies job security is a big problem. So with the hope that we as a family stay together can save rent, pay home loan EMI and if possible with the help of my fathers pension can prepay home loan as quickly as possible. In case of my job loss, my father's pension can be used to run family and some LIC worth 300,000 INR can be used as emergency fund or for paying 6 months EMI. That was my plan. This house is registered on both my wife and my name - only I pay home loan.
All this went well for 3 years. Now I don't have any other loans except home loan. Purchased a car worth 11, 75, 000 INR and have only home loan 39,00,000 (14 years EMI 38,500 INR, with 13,50,000 INR bank balance in home loan over draft account). The house market value is around approximately 72,00,000 now.
But, during COVID lockdown period and even earlier also - due to the conflicts (generation gap, culture difference, different financial background etc.) with my parents, my wife started behaving rudely with my parents - if not directly but indirectly. So I started losing peace at home. I was not able to control the situation at home. Now, parents are not staying with me and have moved to another city to look after my ill sister. Even if my sister's health were in good condition, my parents would have been shifted to next house due to lack of peace of mind amongst family members.
So, given the above conditions, my plans to close home loan in a short period of time is getting difficult. And wife is pregnant now, so it will be really difficult to pre close the home loan as planned earlier. Even if I close the home loan, it will be nearly impossible to say all 6 of us (including my parents) in that house.
Another fact is that if the house cost exceeds INR 70,00,000 (cost till date is 64,00,000 INR inclusive of home loan interest), my yield on the property would be low (Rental value of INR 210,000 per year) and being an apartment its value will depreciate irrespective of its (prime) locality and due to growing huge number of apartments in near by areas.
Also my relationship with my wife has worsened in the very recent past and her parents started blaming me that I have taken money forcefully, which is completely wrong. If required, I want to give back the 21,00,000 (house purchase time 15,00,000 INR and recently 6,00,000 INR) INR that they had given me in these total 3 years, which I never asked/insisted for. My only trust was that my father will support me during rainy days and I can overcome financial burden though I have taken heavy loan.
I got promoted in Job last week with a salary hike of 21.5 % but currently taking psychiatric medication and suffering with lack of peace of mind at home, troubled future financial plans that were based on certain assumptions.
Except the house and vacant land I don't have any other investments also. So, I am worried about retirement as well. My age is 35 and I think this is the right time that I need to take proper steps.
If you people were in my shoes, how would you have dealt with this situation? What best practices could help me reach my goals?
- A loan free mind helps me concentrate on my children, family and stressful IT Job well.
- A loan free house if possible two (one for parents and another for myself)
- Retirement plan
Please share your thoughts and excuse me for the lengthy question & mistakes if any.