Planning To Buy Property At 50? Here Are Some Tips For You
Jagdish Sharma, a 50-year-old New Delhi-based banker, has lived in a rented accommodation since he moved to the city 25 years back. Now that Sharma was headed towards retirement in another 10 years, he wanted to buy a home of his own using the money he had saved over the years and small investments he had made.
He wanted to have a place he could call his own and his children could own in the future. With the need of owning a property, Sharma began looking for his options. And, during the process the biggest challenge, given his age, he faced was that of buying a home loan.
If you are also 50-something planning to buy a home of your own, here are some tips for you before you take a home loan:
Know your income
You should be aware of the fact that while for another few years you will be getting your regular salary, once retired, your pension would be much lesser than what you are earning at present. This needs to be taken into account by you and the bank will do so, too. This will allow you to set a realistic equated monthly installment, which should not exceed 40 per cent of your monthly income. In order to ensure the bank that you will be able to pay the EMIs even after retirement, you could have a co-applicant or co-borrower with you. This could be your spouse or your kin. Or, if there will be another source of income later, you will have to establish your financial stability to the lender.
Set the down payment
Given the age that you are at, a heavy sum for the property should be paid as down payment. But, make sure you have that much money at hand. A good down payment will ease your home loan EMIs, lowering your financial burden once you retire.
How do your other investments look?
If you have made investments over the years, you will be paid off now when you apply for loan. Investments including fixed deposits, mutual funds, stocks, Public Provident Funds can help strengthen your financial capabilities. A lender would take note of these and know that you will have a source of income even when you retire.
A good credit score
A good credit score is a must when you apply for a home loan. So, maintaining a good credit score can help you buy a home loan. For a good credit score make sure you pay all your bills on time, have no dues and also, do not have multiple loans on your name. A well-maintained credit score is half the battle won when applying for a home loan.