10 ULTIMATE TIPS TO BUY YOUR FIRST HOME AT A YOUNG AGE

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10 ULTIMATE TIPS TO BUY YOUR FIRST HOME AT A
YOUNG AGE
https//www.clix.capital
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Buying a house is every individuals dream, and a
large number of youngsters are finding merit in
starting early. Gone are the days when you could
start planning to purchase a house only after
getting married and having kids. At present, with
the easy availability of home loans from hundreds
of home loan providers in India, people in their
20s can purchase at least a small house instead
of renting. Home purchase at a young age has
several advantages. You are saved from spending
huge amounts on home rent, and you get great
returns due to appreciation when you decide to
resell it. If you already have a home, you can
purchase another house and rent it out to
increase your income and pay your EMIs with it.
That being said, follow these tips that can help
you buy a home at a young age.
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START EARNING EARLY
You should start earning as soon as possible in
your life. Once you do that, you can apply for a
credit card and be regular with its payments to
build credit and achieve a high credit score.
Once you reach a score of 725 or above, you can
apply for a home loan if you meet the lenders
other eligibility conditions.
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MANAGE YOUR FINANCES TO
SAVE MONEY FOR THE DOWN PAYMENT
Financial management is crucial to make your
dream home affordable. When you apply for a home
loan, you will need to pay a certain percentage
of the propertys price from your savings, and
the rest of the price will be paid by the lender.
The higher the down payment you make, the lower
the loan amount you will need to take.
Eventually, you will save a lot on the interest
outgo and loan period. So, start cost-cutting,
clear debt, and avoid wasteful expenses to build
funds for your down payment.
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CREATE A BUDGET AND STICK TO IT
Where do you spend most of your income? On rent,
dinners, entertainment, groceries, shopping?
Analyse your expenses and determine where you are
spending money unnecessarily. In the present
digital age, you do not need to do this manually
on paper. You will find many apps that you can
download on your smartphone and use to set a
budget. Compare your income and expenses, track
your expenditures, and cut down on frivolous ones
to save for your down payment.
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CHOOSE YOUR DREAM HOME WISELY
Give attention to the details while choosing the
property you want to buy. Whether you are looking
for a condo, independent house, or an apartment,
understand your familys needs and find a home
that can fulfil them. Avoid buying a house with
amenities that you will seldom use, like a
clubhouse, gym, or swimming pool. Give attention
to its location, whether it is in the downtown or
the outskirts? All these factors can make a big
difference in its cost. So, you need to create a
budget according to your repayment capacity and
choose a house you can afford.
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SAVE AND INVEST
Simply saving money in your bank account will not
attract enough returns. You must consider
investing your money in places where your money
can grow. For instance, the interest rate offered
on a savings account is lower than a fixed
deposit, a recurring deposit earns you even
higher interest, and mutual funds give even more.
Some investment options might be risky. So,
assess the risk factor and invest carefully.
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MAKE A REPAYMENT PLAN
A home loan is a long-term commitment that will
consume a large part of your monthly income for
several years to come. Apart from making a high
down payment, you must build funds to have EMIs
ready for a few months. If at any time you find
it difficult to pay your EMIs, you can rely on
this fund to pay them without defaulting.
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GET READY FOR OTHER EXPENSES
In addition to the down payment and a few months
EMIs, you also need to save some money for other
expenses involved in home loan processing. These
include stamp duty, registration cost, brokerage
fees, insurance, legal fees, documentation
charges, and others. Talk to your lender and get
an idea of these expenses so that you can arrange
enough funds for them.
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IMPROVE CREDIT SCORE
A good credit score of 725 or above not only
improves your housing loan eligibility but also
increases your chances of getting a higher loan
amount at lower interest rates. Check your credit
score and make sure that it meets your lenders
minimum requirement. If it is low, improve it by
paying your bills on time, reducing your DTI and
credit utilization ratios, diversifying your
credit portfolio, and retaining old accounts to
prolong your credit history.
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COMPARE HOME LOAN PROVIDERS
Apart from choosing the right home you have
envisioned, you also need to compare home loan
providers and select the most suitable one. Many
borrowers go for a lender offering them the
lowest home loan interest rate. However,
remember, the interest rate is not the only
parameter to choose a home loan lender. You must
compare the lenders based on several other
factors, including the loan amount, repayment
term, eligibility conditions, documentation
requirements, customer service, and others.
Comparing these aspects will help you choose the
best lender according to your needs,
expectations, and budget.
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SELECT THE RIGHT INTEREST TYPE
You need to give attention not only to the
interest rate but also to the interest type. Your
lender might be providing a home loan either at a
floating interest rate or a fixed one. Some
lenders like Clix Capital also allow you to
select a combination of both interest types. In
this kind of arrangement, your interest rate
remains fixed for the first 2-3 years and then
converts into floating for the rest of the loan
term. You can choose the interest type according
to the market predictions and your risk-taking
capacity.
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So, you see, buying your dream house is not an
easy task, but using the tips mentioned above,
you can buy one at a young age. If you are
minimum 22 years of age and have a credit score
of 725 or above, you can apply for a home loan of
up to ? 2 Crore from Clix Capital and repay it in
up to 25 years.
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