If you are still on
the fence about taking a home loan, we give you four reasons to tilt your
decision in favour of taking one.
The never ending escalation of real estate
costs in India has made it practically impossible for first time home buyers to
buy a house. Every time you decide to take the plunge, interest rates increase
or construction costs shoot skywards and raise the overall house costs.
Ultimately, you realise that there is no way you can raise the capital to make
a full payment on a house you like. So you continue living in rental
accommodation, because you do not want to take a home loan.
This is why you should consider taking a
home loan, if you want to make that all-important first home purchase.
- Prices keep increasing! Most people feel that they can save money and take a lower loan amount to buy a house in the future. But real estate prices normally show an upward trend, unless there is a severe economic downturn. So even if you save money for a year, you will still be short of funds when prices rise and you try to buy a house. So take a home loan now, not later.
- Your finances may change at a later date. Those who have a stable income at the moment can afford to take a home loan and repay it in a reasonable amount of time. It may become impossible to take a loan if you have to take a pay cut or if your spouse quits working to take care of your child. Your financial life will keep changing as the needs of your family change, so postponing the home loan decision for later might not be such a good idea.
- Your eligibility changes as you age. Home loan insurance companies compute your home loan eligibility basis your current income, age and overall repayment capacity. Thus, the tenure of the home loan is higher if you are younger, to account for the number of working years you still have left. It is better to take a home loan at age 25 rather than do the same at age 35, because your loan tenure will automatically be reduced by about 10 years. You can use a home loan eligibility calculator to find out how much loan amount you can get basis your income and age.
- You can always sell at a later date. There is every chance that the house you can afford to buy today may not suit your needs tomorrow. Since property is quite liquid in nature, you can sell the house you bought today to buy a bigger one in the future.
