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 How much can I afford?

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cic.lemur
post Jun 11 2009, 09:50 AM

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QUOTE(dreamer101 @ Jun 9 2009, 04:26 AM)
lcl832002,

Let's take 50%.  Your tax and EPF will take another 20 to 25%.  That means you live on 20% to 25%.  Hence, you have NO SAVINGS.  Now, if you have NO SAVINGS, you have NO EMERGENCY FUND.  That means if you have any kind of financial emergency, you will be wiped out.
Generally speaking, if you working for a company, each year you'll get salary increment, so altho now get 3K and things rather tight, 5 years later it'll generally be much better. For bachelor, saving 50%+ of 3K is not a hard thing to do.

Altho risky to get an expensive house when your salary is low, but if got rich guarantor it's worthit, coz renting means money down the drain and buying cheap house means living in problematic areas, and your property value may not go up much.

cic.lemur
post Jun 12 2009, 09:48 AM

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QUOTE(mathstutorloke @ Jun 11 2009, 09:16 PM)
If I don't buy books I like, I can save more than 50 % sometimes. I have a very good saving habit.
What you say is right. I think it is very cheap to buy a house now as interest rate is very low. Of course, when I say it is cheap, it means that I can afford it.
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As I said, if you got a rich guarantor who can bail you out when you get into trouble, then go for it. If you don't have, if I was in your place, I won't buy yet. Save for several years, build up a healthy savings buffer and then get the house. Because if you buy when you have a tight budget, and something goes wrong, you'll loose everything.

 

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