Responsibilities and financial liabilities may have led to you postponing home purchase. However, it is never too late to own your space. In fact, in your forties and fifties getting a home loan comes with a range of advantages. As you approach middle age, this may be the perfect time to get a home. Here’s why:
In your forties and fifties, you are better prepared
Buying a home sounds easy when you are young. But with higher education costs rising, many graduates and post-graduates are already burdened with an education loan when they get their first job. Then, for the next few years, they pay education loan EMIs. Soon after, marriage happens and before you can realize, you are a family person. By the time you are in your forties and fifties, you have repaid loans, handled extreme financial difficulties etc. In short, you are battle hardened. You now value money much more than when you were young. So, now when you take a home loan to finally buy a house, you are well-prepared emotionally, and financially.
Shorter loan tenures are better
Taking a 30-year home loan when you are 30 is not necessarily a good thing. It means you will repay a loan for 30 years i.e. 360 EMIs. In your 40s and 50s, retirement is about 10-20 years away. A shorter tenure home loan comes with higher EMIs, but it also cuts your overall interest payout to the lender. Yes, it is true that opting for a home loan at this age, means an added responsibility but benefit of lower interest repayment is a big financial gain. The less you pay as overall interest cost means more money goes into your retirement fund. You can speak to Tata Capital’s representatives and discuss your home loan today.
Ability to give large down payment
Buying a home through the home loan route means taking debt. But when you are in the forties, fifties, this is the time you can do some hefty down payments. The higher your down payment, the less is your home loan. Typically, in a home loan, 80% amount is loan given by the institution while the rest 20% down payment is provided by the loan taker. Those in their forties and fifties can make higher down payments of 30-40%, thus reducing total home loan amount and consequently cutting the EMI.
Ability to take advantage of home loan tax benefits
A home loan is eligible for tax deductions. The interest portion of the EMI paid in a financial year can be claimed as a deduction from your total income. Thus, you can get home loan tax benefits of up to a maximum of Rs 2 lakh from the EMI interest. The principal portion of the EMI paid for a housing loan is also allowed as a deduction. The maximum amount that can be claimed is up to Rs 1.5 lakh per financial year, which is also a separate home loan tax benefit. When you take a home loan in your 40s and 50s, you can really take advantage of the home loan tax benefits in a big way. Why? Because your annual income is near its peak during this age-group, and thus home loan tax benefits really helps in reducing annual tax outgo.