There are a lot many things about turning 40 that we do not look forward to like, grey hair and gradually declining vigour – to name a few. However, there is one more thing about turning 40 that is scary – low chances of buying a house. A research conducted by Swinburne University, Australia found that if people do not own a home by the time they turn 40, they probably never will.
Given below are five compelling reasons to buy property via home loans before turning 40.
Reason #1 Higher home loan eligibility
If you want to be more ambitious with your property purchase, it is better to apply for home loan before your 40s. This is because individuals in their 40s usually have higher financial obligations when compared to those in their late 20s and early 30s, and Fixed Obligations to Income Ratio or FOIR is a vital home loan eligibility criterion.
Those with a lower FOIR are automatically eligible for a higher home loan amount as compared to those with a higher FOIR, which implies an imbalance between income and monthly obligations – this will present you as a high-risk borrower to your housing loan lender.
Reason #2 Longer repayment tenure
Housing loan lenders offer a loan repayment tenure that can go as high as even 30 years; however, to avail it, you should be in your late 20s or early 30s at the most. Following this period, the chances of bagging a longer home loan tenure decline. There could be nothing better than being able to finish off with your housing loan during your years of work.
A longer tenure reduces monthly EMIs and smoothens out loan repayment. However, it is essential to remember that home loan interest outgo is higher in case of longer tenure.
Moreover, use online home loan calculators such as the home loan eligibility calculator and home loan EMI calculator for a better assessment beforehand.
Reason #3 Sufficient time for value appreciation
Real estate investment is greatly valued for its appreciation. However, this appreciation in value takes time. Buying a house, at least in your early 30s, helps you witness a significant appreciation in the property’s selling price. Over an extended period, a property located in a posh area is bound to experience at least 10 to 20% appreciation in value, which is enormous. Hence, try to avail a home loan online as early as possible.
Reason #4 No rental woes later in life
If you’re aware of rental woes, you can clearly understand why you wouldn’t want to face them after retirement. There could be nothing worse than facing house insecurity during the most vulnerable years of your life. Plus, post-retirement is a time to reap all the hard work you had sown during your younger years. A home loan availed early in life is the path to avoid hassles later on.
Reason #5 Flexible repayment options
A major aspect of easy home loans is the different options lenders offer for a comfortable repayment experience. One such option is “flexible EMI” wherein the monthly instalments remain low for the initial few years of the tenure and gradually increase, offering room for the borrower’s income growth. This type of home loan repayment facility works best for young borrowers since they have a higher scope of income growth.
So, are you ready to begin your journey towards homeownership? Several lenders offer competitive home loan interest rates. Choose the one whose home loan rates sit well with your affordability.
When you’re well-prepared, you can avoid both application rejection and EMI defaults.
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