You spend a lot of money when you live in rental housing for years. Rising real estate prices in the country could make it difficult to buy a home loan if the purchase plan is postponed. Therefore, it is better to avail a mortgage and buy a house when you are young enough. There are many reasons to differentiate a home loan offer from an early buyer versus a late buyer.
Lenders offer a higher mandate, which translates into lower EMIs.
The term of the mortgage is deducted from the age of retirement of the applicant. Thus, a 40-year-old candidate will have a maximum term of 20 years, the retirement age being 60 years. Few lenders extend their mortgage lending offer even up to 70 years. But it is always better to use a home loan when you are in your early thirties or later, to get the opportunity to choose a larger gap in terms of tenure. A higher mandate also means a lower IME, which also amortizes monthly cash outflows.
Financial institutions perceive young candidates as “low risk”.
Home loan seekers in their twenties and early thirties, with relatively good health, stable incomes and long working lives, are seen as low risk applicants. It is therefore preferable to apply for a mortgage loan at the beginning of professional life.
Younger people can afford to invest in properties under construction.
Those who are single, who have just married or who start early in the professional world can afford to wait a few years until the end of the project. During the life of the project, they may periodically pay for the property and pay smaller installments as successive slabs are laid.
Younger age groups are less burdened with financial obligations.
Increasing family responsibilities and high living expenses from one life stage to another may make home ownership a thing of the past. One should invest in a house of their own in the early years or when they start making a living. It means less responsibility in the future as other important milestones are reached. It also allows the loan to close at a relatively early stage.