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Should I liquidate my investment in equity to buy a house?

Dhirendra Kumar tells how to go about your goal of buying a house

I'm trying to buy a house in Mumbai for which I plan to liquidate my stocks and mutual fund portfolio of 30 lakhs. I built this portfolio to fund this type of major expense. Do you think it will be a right move on my part?
- Saurabh

Yes, by all means. It is your money and there is nothing better than actually achieving a goal by investing gradually and accumulating capital for your planned goal. But I would like to give an unsolicited answer to the home-buying decision. Buying a house makes sense if you are actually going to live in that house so as to save on the rent. Make sure your EMI doesn't exceed more than one-third of your regular income if you are going to borrow. Also, the money which you are going to put as down payment should be equivalent to atleast 40 per cent of the cost price of your home. If these two things are in place then most of the things will be taken care of.

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