Question

My son and daughter-in-law have been harassing me to sign ay my house to them. We live in a Joint family of six persons. I see no reason to sign way my property during my lifetime. At the same time, I do not want to lose my son and his family. Is there some way that I can ensure my own wealth while also keeping him happy?

– KAPIL SHANKAR. DELHI

Answer

You are taking the right decision. as you have to ensure your wife’s as well as your own security in your old age. I can also understand your concerns as a parent who does not want to lose your son and his family. I would suggest that you adopt a middle path by making a clearly drafted Will and having it registered. This should ease the apprehensions your son and daughter-in-law may have.

Question

I have been married for four months and my wife and I are considering buying life insurance with each other as nominees. We earn a gross salary of about Rs 6 lakhs per year each. Can we have insurance that is also an investment for the long term? I am 32 and she is 31 years old.

– MADHAV RANADE, MUMBAI

Answer

Generally, one should have an insurance of around 10 times one’s annual income; hence. in your case, insurance of Rs 60 lakhs is recommended for each of you. One may consider insurance and investment separately. though nowadays. good insurance policies with long-term benefits are also available. But one has to understand and analyze them critically with the total asset allocation. and the purpose before taking a final decision in this regard.

Question

I am a single woman earning a take-home salary of Rs 12 lakhs a year. I want to invest in a property of about Rs 50-75 lakhs close to Mumbai, but am concerned about the house loan rates. I do have some investments of about Rs 10 lakhs, but they are in tax free bonds and I am not very keen on taking them out at this point. Can you suggest some ideas?

– MEETA GOKHALE, MUMBAI

Answer

For a loan of Rs 50 lakhs. EMI at 10.75% p.a. rate of interest for a 10-year period would be Rs 68.169 per month. and for 15-year period, t would be Rs 56.047. For a loan amount of Rs 75 lakhs. it would be 1,02,254 and 84,071 respectively, which are very high considering your present take-home salary. Due to this. you have to consider whether this property is productive [or you from the very beginning — otherwise you will incur an excessive burden in paying the EMIs. Owing to the prevalent interest rates being on the higher side. it is advisable to take a housing loan for an amount that is as little as possible. A better alternative in your case may be to consider investing in a construction- linked property with a reputed builder with a completion time of around two to three years. In such a case, you can pay maximum from your savings and for the rest of the amount you can consider taking a loan with an EMI that you can pay easily as the loan rates are expected to come down in next couple of years’ time.