What is the ideal age for buying a home? Buying an appreciating asset like home is one of the biggest investments when compared to other purchases. Earlier the investment, the higher will be the opportunity for potential returns. If you are planning to buy a home early in your career, here are the benefits.
Longer home-loan tenure
EMIs for home loans are calculated based on the loan amount, tenure and interest of the loan. For longer home loan tenure, the EMIs calculated will be lower. Also, young borrowers can get a home loan with tenure of 25 to 30 years. Moreover, it gives youngsters enough time to choose the best home rates available in the market.
Young borrowers are eligible for higher home loans. The lending bank will examine salary certificates, CIBIL score, credit history, age, liabilities and similar other parameters. Also, the eligibility for home loans depends on the income and repayment capability of the borrower. The expenditure pattern and other liabilities are comparatively less with young borrowers.
Home being an appreciating asset, investing in it is a more sensible option than paying monthly rent. By repaying the loan, homebuyers can claim tax benefit, which gives a financial advantage. Under Section 24 of the Income Tax Act, you can claim up to Rs 2 lakh per financial year on the interest paid on your home loan. And under Section 80C, you can claim up to Rs 1.5 lakh per financial year on the principal repaid.
High Return on Investment
It is a proven fact that the value of real estate investment will increase over time. For example, the launch price of Skyline Springfield Villa at Cochin was Rs. 12 lakh, it has now appreciated to Rs. 2.1 crore.
Above all, a young buyer will be financially disciplined. He will learn how to save and spend his hard-earned money wisely and effectively. It will give him a sense of responsibility.