An increasing number of millennials have made the decision to take charge of their financial lives in their early 20s over the past few decades. Millennials can also disprove the myth that people don’t take charge of their finances until they are 35 to 40 years old.
Therefore, rather than waiting until their late 30s or early 40s, they can achieve even the most significant and important financial life goals, such as home ownership, in their late 20s or early 30s. Young professionals in their early to mid-career are beginning to value home ownership more than renting and moving around frequently.
The advantages of obtaining a home loan from a suitable lender in your late 20s or early to mid 30s are as follows, especially for 30 Lakh Home Loan EMI:
Make the most of the step-up mortgage facility.
the importance of developing new products and techniques to advertise home loans and purchases Lenders have relied heavily on 35 Lakh Home Loan EMI repayment in recent years to maintain potential borrowers’ interest in applying for a home loan to support their dream of home ownership.
Step up EMIs, which were developed especially for young borrowers in their 20s and 30s, are one of the many customised home loan products and repayment options available. The repayment of the home loan’s EMI is correlated with the anticipated rise in the borrower’s future income by this function. After the first few years, the EMI amount gradually increases to reflect the assumed or anticipated increase in the borrower’s income over the loan’s term. Most of the time, lenders set up the home loan facility so that the assumed rate of income growth is between 5% and 8% per year. The 30 Lakh Home Loan EMI would consequently increase proportionately at predetermined intervals, such as every five years for a loan with a twenty-year term.
This home loan repayment option benefits the target demographic of these young borrowers since millennials in their 20s and 30s undeniably have greater potential for income growth than do those in their 40s. They can benefit from home ownership benefits at a young age and pay lower EMIs in the early years of the loan repayment term thanks to this facility, which is a win-win situation. If you choose this 35 Lakh Home Loan EMI option, keep in mind that repayment might be challenging due to the rising EMI amount if your income doesn’t increase as anticipated.
Presence of a longer time frame for the house’s value to increase
Being a young borrower and home buyer has other significant benefits, including the fact that a home has more time to appreciate over the years the earlier it is purchased. It is more likely to happen if a relatively long period of time is available, even though the likelihood of an increase in a property’s value depends on a number of factors, including infrastructure, geography, demand and supply on the market, inflation, and other factors. In our nation, a residential property in a good location would likely experience a respectable annual increase of between 10% and 20% over this protracted period.
Increased eligibility for other loans required as you age older
Compared to millennials in their late 30s or early 40s, those in their mid-20s or early 30s have less debt on average. A lower ratio automatically increases one’s chances of being approved for a home loan because lenders view the borrower’s income to obligation ratio as one of the most important factors when evaluating their capacity to repay. The percentage of your monthly income that is currently going towards repaying fixed obligations like 35 Lakh Home Loan EMI and credit card bills is known as your income to obligations ratio. A higher ratio indicates that your fixed obligation repayments and monthly income are out of balance and increases the likelihood that you will experience a financial emergency, an unexpected expense, or default.
You have more time to comfortably pay off your mortgage with your current income the longer you work before retiring. Because they have fewer working years left and a higher likelihood of experiencing life’s uncertainties at that age, lenders are typically hesitant to lend a home loan to people in their late 40s or 50s who are approaching retirement.
Longer repayment terms are offered to youngsters
Working millennials in their mid- to early-career are more likely to be accepted for a mortgage with a longer repayment term; most lenders extend it to 30 years. Buying a home in your 20s or 30s implies that you have plenty of time to adequately repay the loan obligations because the majority of salaried workers retire by the age of 60. Younger home ownership would increase the likelihood that the loan will be fully repaid during the working years.
Reduced 30 Lakh Home Loan EMI payments are another benefit of choosing a longer loan tenure because your loan obligation is spread out over a longer period of time.
Choosing a longer repayment term with lower monthly payments would allow the homebuyer to make room for other financial commitments intended to help them achieve various life goals, as opposed to choosing a shorter loan tenure with higher EMIs. Therefore, even if you have the resources to make higher 35 Lakh Home Loan EMI payments, it is wise to choose a longer repayment period.
You can always make partial prepayments or later foreclose on the mortgage if you have enough cash.
Last but not least, note that home loan borrowers of any age should keep in mind the following six strategies before taking any decision and submitting an application: Consider increasing your down payment if possible, consider your 30 Lakh Home Loan EMI repayment’s feasibility, compare different home loan offers from various lenders, don’t forget to check your credit score before applying, and consider adding another borrower like spouse to increase your overall loan eligibility as well (including approval chances and eligible amount).