Too Young To Buy A Home? Think Again!
Many of us might wonder whether availing loan to buy a home at a young age is a wise decision or not advisable. Well, the answer is definitely yes, Let’s know how it is beneficial to opt for a home loan at a young age.
Pay before you retire:
Most of the banks and other financial lenders offer loan to buy a home to age between 22 and 70 years. The minimum age criterion for an entrepreneur is 25 years. Coming to tenure, most of the lenders offer a home loan for a maximum tenure of 30 years. A young borrower will be repaying the debt by the time one turns 54. So, the sooner you start the better for you!
Younger the age, higher the loan eligibility:
Future increase in the salary is one of the affecting factors at the time of deciding the amount of loan to buy a home. The chances of a hike in the salary of someone in his 20s are higher than someone in his 40s. So being a young borrower, you will have higher loan eligibility.
Less responsibility, more money:
The responsibilities of a person in his young age (20s) are different from the responsibilities of a person in his 30s or 40s because when you are young, dependents are fewer, so a young home loan borrower gets to enjoy a higher fixed-obligation-to-income ratio popularly known as FOIR.
Flip for feasibility:
One of the popular methods of banks to calculate the loan eligibility is the step-up or FLIP method. The method is used for a salaried borrower, whose income is not very high in the initial years but will increase with time. So the system using the FLIP or the step-up method sets the repayment facility with low equated monthly instalments during the period when the income of the borrower is low and increase in EMIs when the income increases. This works in the favor of the young borrower who is a new earner.
Sufficient time to scrutinize:
Applying for a home loan at a young age also gives you enough time to scrutinize the home loan. In addition to the same, it helps you choose the one that is the best at different time intervals.
-: Quick helpful tips:-
- You must have some additional funds to avail the home loan. These funds will be helpful for making the contribution as down payment.
- There is no right or wrong age for people taking home loans. The decision depends on your equity and financial requirement for debt. Every individual takes his or her own time to settle with the idea of buying a house and availing of a loan for it. However, also take into account the future liabilities if you want to take a home loan.