The best possible investment for everyone is investing in a property. And to invest in a property an individual needs to obtain a home loan that depends on the age of the person who is seeking a home. But, is there is any ideal age for buying a home or it just depends on individual readiness? Let’s read.
Owning a home of one’s own is almost on every Indian’s bucket list. It is considered one of the ideal investments but there are many factors that exert their influence on this investment depending on the appropriate time. These factors comprise of priorities of one’s life, the income level of an individual, investment appetite and most eminently age of the person who wants to own the house.
Banks desire to lend a person only for the time they believe that an individual can pay completely. When a prospective borrower is about to get retired, the notion of giving them loan does not make much sense to them. Therefore, age dictates the duration of a home loan, their savings for the down payment and many other things.
Different age brackets for investing in real estate
- Investing in real estate in late 20s to 40s
When an individual is in their late 20s like the age of 28-29, they have 30-35 years more for their professional life. A home seeker who is of 40 years can also invest because they still have 20 to 25 years left for their established career. People who invest in from the age of 25 to 40 have many benefits on investing early. These benefits are:- They get better deals on a home loan.
- They get more time to pay off.
- They will get tax benefits throughout their career.
- As they are still young, they have fewer responsibilities so paying EMIs are easier for them.
- The purchases house can serve as an alternate source of income if it is rented out.
- They can reap benefits of the investment later.
- People who are married can invest jointly with their spouse.
- Investing when an individual is about to retire ( For people who are above the age of 50)
Now that people work even after the retirement age (that is 60 in India), there are chances of banks approving for their home loan request. The approval depends if they already own a good portfolio of assets and excellent credibility with banks. There are not many benefits for home-seekers of this age group. However, a senior citizen can acquire few benefits from banks. These benefits are:- 50 times loan amount of monthly pension/income (in case of pensioners and salaried persons)
- The loan tenure is mostly a maximum of 15 years or up to the age of 75 of the borrower (whichever is earlier).
- They get lower processing fees.
But, the most suitable and fruitful strategy at this age should be stimulating the worth of the existing assets. Only people who have a great understanding of the market and believe in personal finances should invest in real estate at this stage.
Buying a home for own-use
If a house is to be bought for own-use, there is no ‘ideal age’.
If one has been living in a rented house since long, then buying a home even at the age of 65 is completely all right and makes sense. It gives them liberty from continually repeating expenses of the monthly rent. Property is an asset that is the perfect bequest to leave behind for one’s children.