The eras gone advised you to buy a home late. Once you had “other expenses” out of the way like education of your children and their weddings. The trends and wisdom now dictate to do the opposite. The turnaround of thoughts has come gradually. You have more younger people now coming out to buy their first home. Of course, the situations, and the economy change has helped bring about this difference in approach.
Buying a property at an early age helps in many ways. You are buying it much cheaper than you would say 10 years from now, if you see it that way. The home loans available to you when you are below 30, albeit the interest being the same at a later age, are much lower as the tenure is much longer. The banks find it safer to provide you this duration looking at the the fact that you are just starting your life and repayment would not be a problem, other expenses are not as much as a person in his 40s, the responsibilities are less, the diseases are presumably left for later in life. It also help you make an easier life, as EMI that sounds and feels higher does not seem as high 5 years down the line when your repayment capacity along with your earnings is much higher. The probability of you gaining and acquiring more assets down your life line are higher, as you have one thing out of the way and that is the roof you call your own home. you may also upgrade to a bigger home as your income grows, as selling your first home provides for a good buffer. This is a more sensible approach, as waiting to reach a certain point to invest into a property sometimes never comes. Once you are stable, then investing in assets like commercial properties or equities or any other savings are much better. After all, you have a good foundation laid; the building stands better.
Lets take an example. Suppose you invest in a property of Rs 60 Lacs when you are 30. Later at the age of 40, your repayment ability will increase. the a house with capital appreciation may now be worth Rs 85 Lacs. Add another home loan eligibility of Rs 30 Lacs, you could now afford a house worth Rs 1 Crore and 15 Lacs. So this way you have grown into having a higher asset and this goes on till you have a great asset value on retirement.
Lower EMIs are easier to pay off when you are younger as your expenses have not yet touched their highs. In case, the spouse is working, it all adds up to a better home loan and repayment ability for the couple.
The tax benefits are great as well. Consider this. As per existing laws, as reported in Times Property today, a deduction of Rs 1.5 Lacs is allowed against interest on borrowed capital. the loan must have been taken to construct or acquire a house. the construction should have been completed within 3 years from the end of financial year in which the capital was borrowed. The borrower will need to ask the bank to furnish the documentation for interest paid over the years. For details, please consult your tax consultant as well, as I am not an expert but blog to educate and bring to light certain things to you.
The author Vineet, writes for capital Tree. Capital Tree Real Infra Pvt Ltd has helped hundred of individuals acquire their dream house. Be the next! Call us for consultation, or visit capitaltree.in for details of properties in Gurgaon.