It is no wonder that most people wait to have financial stability before investing in a house. After all, it’s a major financial commitment. However, with sound financial planning, you can own your dream pad, even at the beginning of your career. Yes! What’s more, property purchase early on has benefits manifold.
So, if you’re wondering how to buy a house at a young ageand why, read on.
Pay lower EMIs
The principal of your loan is split across EMIs, and interest is added to it. So, a longer term means a higher number of EMIs and smaller EMI amounts.
As a young loan applicant, you can opt for a longer loantenure. This means you save EMI funds and can still close the loan before retirement. However, a longer term also translates into a higher overall interest payable.
To get a better idea about the potential EMI and interest applicable on your loan, use ahome loan EMI calculator.
Avail of tax deductions
As a first-time home buyer, when you buy a house with a housing loan, you get several tax benefits. Under Section 80C, you can accrue tax deductions worth Rs. 1.5 lakhs on the principal repayment. Besides, you get maximum tax-deductible benefits worth Rs. 2 Lakh on interest payable under Section 24.
Additional Read: Top Benefits of Buying a Home in a Woman’s Name
Higher ROIs on property investments
Property prices are known to multiply over time. So, the earlier you buy a property, the more its value appreciates. Besides, buying property early on is a profitable investment, even if you don’t plan to live in it. This is because you can rent a property out after purchasing it and get an additional income source. Or you can sell them at an appreciated market value.
Building credit with property investments
Since property prices are rising, it’s smart to invest with a loan. When you get a loan and repay it on time, it reflects on your credit history. What’s more, timely paying the EMIs lifts your credit score, allowing you to qualify for higher loan amounts and lower home loan interest rates in future.
Now that you know about the why let’s see how you can make a property purchase early in life.
How to buy a home at a young age?
- Make a budget considering all your current financial obligations, income, and savings.
- Now, allocate an amount for your housing loan down payment. Why? That’s because, as a borrower, you’ll pay 10-25% of the property’s cost as a down payment. A larger down payment reduces the loan principal significantly, ultimately lowering your EMI burden.
- Check your preferred lender’s site thoroughly to understand the eligibility criteria, interest rates, features offered, and additional costs applicable on loan.
Additional Read: Your Step-By-Step Guide to Buying a House
Over to you
Ultimately, whether you should buy a house while you are young depends on your financial goals. If you want to purchase a property and are looking for the right financial backing, turn to Tata Capital. Get a variety of multi-purpose home loan options to choose from at competitive rates and easy repayment schemes. Visit the Tata Capital website today to learn more.