25 MAY, 2021

Gone are the days when there were set timelines to achieve life goals. Nowadays, be it getting married or buying a house, confidence in taking that decision is of paramount importance. So, if you are planning to buy a house in your 40s, this could be the right time to move into your dream home. Moreover, a home loan can help you do that quite easily. However, you must be careful about a few finer aspects while applying for a home loan.

Here are a few points you must keep in mind while applying for a home loan in your 40s. 

Things to Consider while Availing a Home Loan in Your 40s

Choose lender carefully

Do thorough research while choosing the lender when you apply for home loan. It would be better not to assess the lender only based on interest rates. You should also consider other factors like repayment flexibility, documentation, lender’s credibility, etc,. Don’t miss out on enquiring about different loan related costs like prepayment charges and processing fees. 

Avail a joint loan

So, when you are taking a home loan in your 40s, it would help to avail a joint home loan to increase the chances of loan approval. In a joint loan, the lender takes into account the income of both the applicants to evaluate  home loan eligibility. As income is one of the important criteria for  home loan eligibility, taking a joint loan with your working spouse can help you take a high-value loan. You might have other financial commitments to fulfil at this age, so a joint loan would divide the repayment responsibility between the two and make it easier for both to repay the loan.

Try paying a higher down payment

Taking a home loan in your 40s would reduce the maximum tenure you can avail. Therefore, it would be better if you can reduce your loan amount by paying a higher down payment. A higher down payment would reduce your monthly EMI payout as well as the overall interest. However, avoid utilising all of your investments or emergency funds to pay a higher down payment.

Adjust your loan tenure

The maximum tenure of a home loan in India is usually around 30 years. Considering that the retirement age in India is 60 years, the maximum tenure that the lender might give you at the age of 40 would be 20 years. If you can afford a higher EMI, you can opt for a shorter tenure of 10-12 years.

There is no right age to purchase a home. You should invest in a house only when you are financially prepared, as it could be a huge financial obligation. Whether you are in your 20s, 30s or even 40s, you can easily fulfil all the home loan requirements to buy the house of your dreams if you plan it well.

While you are in your 40s, you might have a stable job with a consistent flow of income, while the responsibilities on your shoulders are limited. You could also have started a family. Whatever be your situation, usually, 40s is the time when you can comfortably invest in a house. Moreover, returning to your own house at the end of the day, can give you a sense of achievement and calmness that a rented place might not be able to do. So, If you are ready to move into your dream home, do not delay the decision any further and apply for a home loan today!

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.