Dev Singhraha
Relocation Expert
Urban and sub-urban cities witness young crowds, who are in their 20s and 30s, to opt to invest or buy their dream homes by availing home loan rather than waiting to buy one with their retirement money. Are you one of them? If you are? Then consider the following points before taking a loan.
  1. Down Payment: Most of the banks lend 80 per cent of the loan amount, which means you have to be ready with the rest 20 per cent amount as down payment. Besides, stamp duty will cost you approximately another 6 per cent of the amount plus 1 per cent registration fee. So, be ready with this minimum amount that you will need to bear.
  2. Financial Position: As long as you are maintaining healthy account history in terms of repayment, banks would be willing to lend you money. However, you need to consider your financial situation; are you still repaying your education loan? Did you avail car loan? Home loan is a huge commitment, which might create a tight situation if you have other liabilities. Consider these as well.
  3. Career Stability: Early in your career? Not sure if this is a right job for you? With all these questions in your mind, the home loan will limit your prospects of switching jobs. Instead your entire focus will shift to loan repayment. So, make sure that you are in the right job before availing home loan.
  4. Fallback Option: If you are single, then you are solely responsible for the repayment of your EMI of home loan. Although property investment is one of the best investments regarding return on investment (ROI), it is vital that you have a backup plan in case of an emergency and you are unable to repay your home loan on time.  A joint loan has a cushion that in fact, you are unable to repay, your partner could be a fallback option to repay.
  5. The necessity of Home A Need: Buying a Home is a big decision especially when you are in your 20s. The reason is that a lot of investment is involved regarding down payment and home loan. Think and rethink before you decide whether you need it. It should be a practical decision rather than emotional. Do market research before applying for a home loan; look for a cheapest loan and property in a right location.
Home is not something that one buys as a short-term investment. Hence, consider all these points before you make a move.
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