Do you think you are too young to buy a house yet? Do you think it is better to live with your parents, and save money for your first home? Research may show that you’re probably wrong! Most people may think that living with your parents would help you save for a significant down payment, but it may not be so. There may be no long-term “economic” advantage to living with your parents. While living with your parents is certainly a bond of love that should exist forever, living with them can also have negative long-term economic consequences. That’s because people living with their parents so not always save for a larger down payment or buy more expensive homes; they have less in equity than someone who bought a home earlier in life. The difference between buying your first home in your mid 20’s to early 30’s thus means you can miss out on a significant amount of home equity.
Why equity matters
Based on the latest data, home values are to appreciate at an average of 3% every year. So, by owning a home, and paying your monthly mortgage, you’re increasing your family’s wealth. The earlier you purchase your first home, the more equity you’ll have once you reach retirement age. The idea should thus be to start at the earliest. Here are a few reasons why it is beneficial to opt for a home loan at a young age.
Younger the age, higher the eligibility of the loan
The chances of salary raise of someone in his 20’s is higher than someone in his 40’s. And, future increase in the salary is one of the affecting factors at the time of deciding the amount of loan to buy a home. So, being a young borrower will bring to you a higher loan eligibility.
You’ll pay off before you retire
Many banks and financial institutions offer loan to buy a home, with the minimum age criterion being 25 years. Also, most lenders offer a home loan for a maximum tenure of 30 years. A young borrower will thus be repaying the debt by the time one turns 55; hence the sooner you start, the better for you.
With lesser responsibilities, you’ll have more money
A person in his 20’s will have lesser responsibilities than one in his 30’s or 40’s. With a family to take care of, the expenses increase, meaning lesser savings and lesser funds. Early borrowers have lesser dependents, so a young home loan borrower gets to enjoy a higher fixed-obligation-to-income ratio.
As you can see now that applying for a home loan at an early age can prove to be more beneficial than doing so after the late 30’s. It’s thus wise that you plan on buying a home and apply for a loan at the earliest. However, you must be sure that you also have some additional funds to avail the home loan, as these funds will be helpful for making the contribution as down payment. While we won’t say that there is any right or wrong age for taking a home loan, but it is always wise to start at the earliest. Nevertheless, the decision depends upon your equity and financial requirement for the debt. Take your time to settle with the idea of buying a house, and availing a loan for it. However, also take into account the future liabilities, if you want to apply for a loan. And, once you’re decided that you want to purchase, we’d suggest you to invest in the new villas in Sarjapur Road Bangalore, named under MJR Divine Meadows, from the very trusted MJR Builders.