SYNOPSIS

If you plan to take a home loan in your 40’s, seek an optimum offer by –

maximising the tenure
adding a co-applicant
increasing the down payment
making lump sum repayments, when possible
matching your loan tenure with your retirement age
researching well before selecting a lender

Nowadays, because of better job opportunities and increased salaries, young professionals purchase a house with the help of a home loan in their 30’s or earlier. It is possible you may have missed this opportunity for some reason and now, in your 40’s, you want to buy a home by availing a home loan. At this stage, you may have reached a higher rung in your career with a better salary grade. But you have also reached closer to your retirement age and may be saddled with several responsibilities like taking care of aged parents, meeting the expenses of children’s higher education etc. which may bring a financial strain on you.

Opting for a home loan at this age involves taking on an added responsibility of repayment. Further, you may need to ensure that the repayment tenure is coterminous with your retirement. In other words, if you plan to retire at the age of 60, you will have about 15-20 years to repay the home loan. This necessarily means shorter loan tenure and bigger amounts of EMI payments.

While this may appear difficult at first, it can be done if you keep in mind the following aspects:

Maximising the tenure

Usually home loan providers allow a maximum tenure of 30 years for those availing a loan in their 20’s-30’s. But those in their 40’s may be eligible for a lower tenure, keeping in view the imminent retirement age of 60. However, if you have a good credit score, a steady employment, etc. you may be able to convince the lender to extend the loan repayment period beyond retirement.

Opt for a joint home loan

Availing a joint loan with your working spouse or one of your financially independent children will not only result in you being eligible for a higher home loan amount but will also reduce your EMI outflows individually. In addition, you can reap higher collective tax benefits than in the case of a single applicant loan.

Opt for larger down-payment

You can reduce your home loan repayment outflows by making a larger down payment. This will not only result in lower EMIs but also reduce the interest component. However, you must ensure that you don’t overstretch yourself. You must also avoid using funds you have kept aside for medical and other emergencies.

Lump sum Repayments

It is advisable to ensure that the repayment tenure of your home loan is coterminous with your retirement. This will ensure that your retirement corpus is not used for home loan repayment. You could make lump sum repayments from any bonus, gratuity, etc. that you receive, or any other windfall such as an inheritance.

Research well before selecting a lender

There are a number of home loan providers. It is important to make a proper assessment in order to find a suitable one. You must consider a number of parameters to select a suitable lender; only considering the rate of interest is not wise. You should assess the lender’s reputation and credibility, the lender’s ability to guide you on choosing a suitable home, flexibility of repayment, etc. Also choose a lender that keeps the formalities and the paperwork minimum.

To conclude, owning a home is a dream for most people. The cost is formidable, but it will not be hard on you if you plan to buy a home through a home loan early in your career. However, if you have missed this stage, don’t fret. You can get a home loan even in your 40’s; just use these few pieces of advice in order to become a home owner!

Also Read - Step by Step Home Loan Procedure