Reasons You Should Be Buying A Home In Your 30s

 

If there were an Indian dream (similar to the popular American dream) then one of the things it would involve is buying a house. As Indians we have always loved investing in real estate as it is something tangible and not an investment that only exists on paper. While this mindset is slowly changing, the importance of home ownership cannot be undermined. Even today, buying a house is probably one of the most common financial goals of all Indians. It has financial and emotional value and is considered be a sign of success in most households. That brings us to a relevant question: What is the right age to buy a home? Assuming you are employed and need a mortgage loan to fund your purchase, should you buy a home early in life (age 25-30) or later? While we believe the best time to buy a home is when you are financially ready, we always advise prospective buyers to start early and buy a home in their 30s. Wondering why? Here are 7 reasons you should be buying a home in your 30s. 

You Have a Relatively Stable Career 

If you look at the stability of your career, you're probably more stable in your 30s than in your 20s. This is an important consideration as a mortgage loan is a huge commitment and requires a stable source of income to ensure the instalments are paid on time. Therefore, it is important to take out a home loan when you are in a stable position in your career. This makes the 30's a better time to buy a house compared to the 20's. 

Optimum Loan Term 

A mortgage loan is a long-term loan Split. However, you should also understand that the longer you pay off the loan, the more interest you will have to pay.

It is therefore important to choose a term that allows you to repay the loan comfortably without paying too much interest. If you take out a home loan of Rs.50 lakhs at 7% interest. Here's a look at the different terms and the difference in fees and interest paid: As you can see above, as the term increases, the monthly fee goes down, but the total interest paid goes up.

The difference in EMI is small, but its impact on the total amount of interest is quite significant. If you can pay Rs 33,000-35,000 per month, if you make an effort and pay Rs 38,700, you can save about Rs 38,000.  13 lakhs over the life of the loan. On the other hand, if you choose a term of say 15 years, the EMI can increase dramatically, making it difficult to maintain.

So, in your thirties, with at least 30 years of professional life ahead of you and a pretty decent salary, buying a house makes more sense. Smarter Spending Habits When you start working after about 15-20 years of education, you have dreams and aspirations. Most young people are somewhat careless with their money because they have waited a long time to be able to make and spend money without having to answer to their parents. So they buy the latest gadgets, travel frequently, eat at the best restaurants in town, shop for the latest brands of clothing and accessories, etc.

However, as you get older, you learn the value of savings and investments and begin to be smarter with your money. In most cases, people are paying off their student loans (if they have any), outstanding credit cards, and other small debts. Therefore, the thirties are the ideal time to devote yourself to a more rewarding and long-term financial commitment: buying a home! Availability of Funds for a Down Payment Most people plan ahead before buying a home.

This means working on their finances, building a small reserve for emergency expenses, budgeting for their monthly expenses, and having funds for a down payment on the house. All this takes time. For example, even if you start working between the ages of 23 and 24, it would take you 8-10 years to stabilize your finances and put money aside for a down payment. This is an important consideration as a higher down payment would reduce the size of the mortgage loan and help you buy the home of your dreams. Many people who buy a home by age try to get a personal loan for the down payment or borrow from family or friends.

While this may work, it puts a lot of strain on you in the first few years after buying a home. More clarity about where you want to settle down. Buying a home is like putting down roots in many ways. Knowing where to settle is therefore a prerequisite for buying a home. In the last two decades, young people have become very mobile and want to be citizens of the world.

They are open to exploring jobs in different corners of the country and the world. Post-COVID, teleworking has opened the doors to a more flexible life destination, as professionals don't have to be constrained by proximity to the workplace. In fact, many prospective homeowners in Mumbai have started looking for properties in Dombivli, Kalyan, Panvel and Bhandup as the prices are affordable and many reliable developers have turned their attention to these areas. In such moments it is important to be clear about where you want to establish yourself.

This clarity is best when you are in your thirties and better understand your tastes and preferences.

High return on investment

Here we would like to see a house as a real estate investment. When you compare all investment options, real estate is the best in terms of returns with relatively lower risk. While there is slack, property prices generally increase over time and offer a good return on investment. In fact, real estate prices increase with inflation, making investing in real estate the best long-term hedge against inflation.

Real estate can generate returns in two ways: capital appreciation and rental income if you rented the home. To get the most out of investing in real estate, you need to spend enough time on it. In the long term, real estate has the potential to generate good returns. If you're buying a property in your 30s, give it plenty of time to appreciate in retirement.

Tips for buying a home in your 30s don’t overdo your budget. Buy what you can afford. You can always sell the property and upgrade to a better/bigger one later. No loss of money through rent

If you don't live at your parents' house, you probably pay rent. Depending on the city and region you live in, this can be a significant amount. The money paid as rent eats up cash registers because it does not generate any returns. When you buy a home with an EMI close to the rental amount, you get a home and enjoy a return on your investment. Buying a home in your 30s gives you plenty of time to pay off your mortgage and the property. Prices are increasing to offer a generous ROI.

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