What Is the Right Age to Buy a Home?

Everyone aspires to become a homeowner someday and with the current millennial generation, this day seems to become all the more sooner in their lives. The well-educated savvy youth of these days starts saving for a home right from the beginning of their careers.

Some of the factors which are aiding this spurt of a large number of youngsters buying homes are an increasingly higher disposable salary and an improved purchasing power. Another important factor is the current trend of small nuclear families living independently and needing a pad of their own. Since the modern generation doesn’t want to face the hassles of dealing with fussy landlords, they are opting to invest in their own homes early on and use the rental payouts as EMI payments.

However, there is a lot of debate raging on what is the right age to invest in a home. Experts are of the opinion that 30-35 years of age is the best time to take the plunge into becoming a homeowner. By this time, the buyer has usually accumulated the amount required as a down payment for homes with some surplus thrown in for a rainy day.

The important thing to keep in mind is that there is no disadvantage to buying a home at a comparatively younger age as property investment is always the best asset. With cities getting more congested, the cost of properties is only set to increase further and this will surely work to the advantage of homeowners. The flip side of the coin here is that the longer you wait, the larger the down payment capacity, the smaller the loan taken and the easier to pay EMIs. Here are some points to keep in mind when buying a home:

• • Ensure you have savings that will see you through 6 months of living expenses plus EMIs.
  • EMI shouldn’t be more than 30% of your income.
  • Don’t pre-pay the loan until five years as it reduces tax benefits.
  • Avail of a Life insurance cover that is 200% of your home loan to cover your family in case of unforeseen events.

Conversely, the advantage of buying a home when 40+ means you have substantial savings and need a smaller home loan. The disadvantage, however, is that you are supposed to be saving for your retirement by this age; hence 30-35 is considered the best age to buy a home according to experts.

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