- Buying your dream house is not just limited to taking a home loan or repaying the principal with interest.
- With the variety of options available on the market today, it has become relatively easy to obtain a home loan at an attractive interest rate. But what happens if you decide to take out a home loan much later in life? It can be stressful and exhausting, especially for applicants who haven’t researched the fine print properly before signing.
- This is important because as you get older, it becomes a little more difficult because of certain restrictions imposed by housing finance companies. Lenders typically assess a borrower’s ability to repay a home loan at the time of approval of the loan application.
- In your 20s and 30s, the home loans are available for a maximum of 30 years. You can easily pay it back during active working life. But if you take it when you have reached the 40s then the repayment tenure will be short (15-20 years) or retirement age. Without a regular income, it can be difficult to pay back a loan.
- Some housing finance companies extend this period to 58 or 60 years, depending on paying capacity and creditworthiness.
- If you are in your forties and need a home loan, you can take out a loan jointly with your working spouse, children as co-borrower making the process easier in many ways. For example, if your wife is younger than you and both of you have a high and stable income, you have better chances of getting a loan. She can repay the loan when you retire.
- In fact, you may be entitled to up to a home loan of the higher amount or a second one.
- If you cannot take out a joint home loan, the next best thing would be to reduce your EMI to make the property you choose more affordable for you and your partner (or in some cases your family members). You’ll need to make a large down-payment to do that. It’ll reduce your EMI along with interest (fixed or floating). This would depend on the length of the home loan, which can be five to 20-25 years.
- The third option is to repay the outstanding with your gratuity, bonus or any inherited money.
- This reduces your financial burden and repays the outstanding credit with the money you inherited.
- You can leave your long-term savings intact, which you can then use when you retire.
- Given the number of home loan products available in the home loan market, only thing that will work in your favour is your own research and understanding of home loans. Take a careful look at the features and advantages such as eligibility criteria, rate of interest, flexibility of payments, reading the fine print, etc.
- Carefully assess the lender’s reputation and credibility so that the process of getting the loan sanctioned is shortened and get the excellent customer service throughout the loan term.
- While it is ideal to take out a home loan in the 20s or 30s but there are also advantages in taking out a home loan in the mid-40s.
For example, an individual who has been working for, say, 15-20 years and is married with school or college-going children will have better clarity on his housing requirement vis-à-vis purpose, type of house, total area and location. Having worked for so many years, he will have saved a decent amount of money and be in a better position to manage the initial down-payment and EMIs without compromising on other financial goals. Besides, the financial institution is likely to sanction a home loan quickly and easily if the applicant has a stable business or a stable job in hand is earning a good income.
If you take these simple but important steps, then applying for a home loan at 45 will seem as if you are taking it in your 20s or 30s. Age is no longer a hurdle to achieving your goal of a dream home.
For instance, a person who has been working and married for 15-20 years, at school or college, will have a reasonable amount of money to meet their housing needs. After so many years of work, you will be able to save money for decent amounts and meet your home loan down payment and EMI without compromising your other financial goals.
Age is no longer an obstacle to achieving your dream home goals, and if you take these simple but important steps, you will be looking for a home loan between 45 and 30 years old. Home loans can be approved by financial institutions as long as the applicant has a stable job with a good income.