It is never too late to own your home of dreams.
Till a decade back salaried people used to wait until their retirement to buy their home using their retirement corpus. Now the scenario has changed. Only after two years of being employed, one becomes eligible for a home loan. With the help of a home loan, owning a home has become an easy affair even for young professionals.
Buying a home when you are still at the beginning of your carrier comes with a number of benefits. But the benefits are never less if you take the same decision in your 40’s. A decision to buy a home can never be a wrong decision at any age, provided you take care of some points considering your age. If you are about to buy a home at the age of 40, then here are some points to keep in mind.
Points to Consider While Buying a Home at Your 40s
Keep the Tenure Shorter
The maximum tenure on a home loan is of 30 years. But if you are in your 40’s you can’t avail a tenure of 30 years. The reason behind the same is that a home loan can run till 60 years of age of the borrower. So when you apply for a home loan at your 40’s, the maximum tenure can be availed is 20 years. However, the experts on personal finance advice to keep the tenure shorter than 20 years in order to save interest payments.
Go for a Larger Down Payment
Ideally, an employed person of 40 years of age, must have a good amount of savings. If so, then you can use a part of your savings corpus towards a bigger home loan down payment. Once you keep aside your emergency fund, the rest can be used for the down payment of the home. A larger down payment is assured to lessen the loan burden. Additionally, the interest component can also be reduced by making a larger down payment on a home loan.
Try Part Payments
It is always better to make part payments on your home loan. If you can pay off your loan before you reach your retirement age, you will have no debt burden on your retirement. Moreover, along with the growing age, the health condition of your or your spouse may also go down. At present time, the medical expenses are really high. If one has to bear the medical expenses with an ongoing home loan repayment, it would create a real financial pressure on the person. Considering all those facts, it is advised to pay off the loan prior to the end of the loan tenure.
Opt for a Joint Home Loan
Joint home loans always bring a lot of benefit to the borrower. A joint home loan with your working spouse can increase the loan eligibility and shares the debt burden. The additional benefit of adding a co-applicant who is of lesser than 40 years can help you get a longer tenure too. Along with all those advantages, both the applicant can enjoy tax benefits.
Select the Right Lender
Before you do anything else to make your home loan more beneficial, you are to select the right lender. Finding the right lender makes a lot of difference while you repay the loan. The repayment of a home loan runs for a minimum of 10 years. If you are not satisfied with the services provided by your lender, the repayment period can turn to be a terrible time for the borrower. Before you sign the loan agreement, you must know all the terms and conditions and fees & charges that the lender may impose on you in the future.
Opt for a Loan Insurance
While you buy a home at this age, a loan insurance becomes essential for you. One can have a loan insurance for a specific period of time such a year or more or for the whole tenure. A loan insurance secures your home loan in the case of death or disability of the loan borrower. One can even opt for a term insurance to alternate a home loan insurance for more benefits.
The Concluding Lines
One can avail a home loan at any time before reaching 60 years of age. Buying a home at the 30s is considered best but if you have missed it, there is nothing to worry. One can still buy a home at the 40s and enjoy all of its benefits. Only if you take some smart steps when you apply for a home loan, you will be able to own a better home in your 40s than the one which you would have owned in your 30s.