The percentage of millennials who choose to take charge of their financial lives in their early 20s has increased over the past few decades. Millennials are also able to reject the old age myth that one only takes control of their finances after they are 35 to 40 years old.
So, rather than waiting until their late 30s or early 40s, they are able to accomplish even the most significant and important financial life goals, like owning a home, in their late 20s or early 30s. Young professionals in their early to mid-20s are beginning to value home ownership more than renting and moving around frequently.
The advantages of obtaining aadhar Housing Finance home loan from a reputable lender in your late 20s or early to mid 30s are as follows for those who fall within the age range of 25 to 35:
Make maximum use of the step-up mortgage facility
the importance of developing new products and strategies to further promote home loans and purchases Lenders have relied heavily on EMI repayment in recent years to keep prospective borrowers interested in applying for a home loan to support their dream of home ownership. Step up EMIs were developed specifically for young borrowers in their 20s and 30s and are one of the many customised PNB Housing Finance home loan products and repayment options that are available. This function links the repayment of the home loan’s EMI to the anticipated rise in the borrower’s future income. After the first few years, the EMI amount gradually increases in line with the assumed or anticipated increase in the borrower’s income over the loan’s term. The home loan facility is typically structured by lenders so that the rate of income growth is assumed to be at a preset rate, such as 5%-8% pa, and as a result, the EMI would increase proportionately at predetermined intervals, such as every five years for a loan of twenty years.
This aadhar Housing Finance home loan repayment option benefits the target demographic of these young borrowers because millennials in their 20s and 30s unquestionably have greater potential for income growth than do those in their 40s. They can benefit from home ownership benefits at a young age and lower EMI payments in the first few years of the loan repayment term with the aid of this facility, which is a win-win situation. When selecting this EMI option, however, keep in mind that repayment might become challenging due to the rising EMI amount if income doesn’t increase as anticipated.
The longer time frame for house’s value to increase
The fact that a home has more time to increase in value over the years the earlier it is purchased is another significant benefit of being a young PNB Housing Finance home loan borrower and homebuyer. It is more likely to happen if a relatively long period of time is available, even though the likelihood of an increase in a property’s value depends on a number of factors, including infrastructure, geography, demand and supply on the market, inflation, and other factors. In our nation, a residential property in a good location would likely experience a respectable annual increase of between 10% and 20% over this extended period of time.
Increased eligibility for loans later in life
The average amount of debt held by millennials in their mid-20s or early 30s is lower than that of those in their late 30s or early 40s. A lower ratio automatically increases one’s chances of being approved for a aadhar Housing Finance home loan because lenders view the borrower’s income to obligation ratio as one of the most important factors when evaluating their capacity to repay. The percentage of your monthly income that is currently going towards repaying fixed obligations like loan EMIs and credit card bills is known as your income to obligations ratio. A higher ratio indicates that your fixed obligation repayments and monthly income are out of balance, which increases the likelihood that you will experience a financial emergency, unplanned expense, or default.
Additionally, you have more time to comfortably pay off your mortgage with your current income the longer you work before retiring. Because they have fewer working years left and a higher likelihood of experiencing life’s uncertainties at that age, lenders are typically hesitant to lend a PNB Housing Finance home loan to people in their late 40s or 50s who are approaching retirement.
Longer repayment term available
Working millennials in their mid- to early-career years have a better chance of being accepted for a mortgage with a longer repayment term, with most lenders extending it to 30 years. Buying a home in your 20s or 30s implies that you have plenty of time to adequately repay the loan obligations because the majority of salaried workers retire by the age of 60. Younger home ownership would result in a higher likelihood that the aadhar Housing Finance loan will be fully repaid during the working years.
Reduced EMI payments are another benefit of choosing a longer loan tenure option because your loan obligation is spread out over a longer period of time.
Choosing a longer repayment term with lower monthly payments would allow the homebuyer to make room for other financial commitments intended to help them achieve various life goals, as opposed to choosing a shorter loan tenure with higher EMIs. Therefore, even if you have the means to pay higher PNB Housing Finance home loan EMIs, it is wise to choose a longer repayment period.
You can always make partial prepayments or later foreclose on the mortgage if you have enough cash.
Last but not the least, six strategies that housing loan borrowers, irrespective of the age, should keep in mind before submitting application, are- try to accumulate a bigger amount as down-payment if possible, do not ignore your EMI feasibility, compare various housing loan offers of different lenders, recheck your credit score before submitting application, and consider looping in another applicant to uptick overall loan eligibility.