17 AUGUST, 2022

In your 20s, you lay the foundation for your future. A home becomes one of the most important milestones in this journey.

There isn't much advice that you would receive about buying a house when you are in your 20s. Because it is always assumed that taking on such an overwhelming responsibility at such a young age would be practically impossible, planning to take a loan at the age of 20 becomes easier with a housing loan eligibility calculator.

Nevertheless, if you are willing to look for a few advantages of investing in real estate early in your life, you will find several. Investing in real estate can provide you with many benefits, such as being the owner of a growing asset, having financial stability, and leaving behind a legacy for your children and grandchildren, among many others. Here are some of them:

Tax Savings Can Be Maximized

A house may seem like a considerable expense if you are in your 20s and looking to buy one. It can result in significant tax savings in the long run. It is not unknown to you by now that the tax cut at the end of the year can hurt your overall income.

You can make a living every day by working hours and hours at the office if you put in your hard work and efforts. It would be great if it were possible to reduce your tax output and spend the extra money on something worthwhile, such as a home, without increasing your tax contribution.

Make Sure Your Future Is Secure

To bring discipline to your finances, you must repay your home loan over an extended period. With every EMI payment, you are also getting more confident about the asset you create for your future. Aside from that, real estate prices are always on the rise, so investing in a property in the right neighbourhood at the right time will allow you to reap the rewards for decades after you have paid off your mortgage.

Thus, signing up for a home loan in your 20s not only allows you to pay it quickly but also helps you build your credit score, which will have a significant impact on the future of your life and help you make an asset.

Chances to Take Bigger Loans Increases

Depending on your age and employment status, your ability to borrow a loan is one of the significant factors determining how much you can borrow. For instance, if you work in a reputable company, you can easily access bigger loans.

Furthermore, you have several years available to work in a reputable company. In other words, the bank is very confident that you will be able to repay your loan over time because your income will likely increase.

Enjoy a Lower EMI When You Take Out a Loan for a Longer-Term

In a perfect world, a home loan's tenure should end before the end of your retirement years. It means that if you have taken a home loan in your 50s and retire within ten years of taking the loan, you may be able to get a tenor of around ten years to pay off the loan since this is the timeframe in which you will get retired.

When you take a loan for a home in your 20s, you will be able to benefit from the maximum tenor that is available with the loan. Your current home loan interest rates are really low. In 15–20 years, you will be able to repay the loan, and then you can focus on planning for your retirement afterward.

A loan with a maximum tenor will also enable you to pay a lower EMI every month. In this way, your monthly outflow will be reduced, and at the same time, you will be able to save money.

The Returns You Get Beat Inflation

There is no doubt that the Indian real estate market is currently increasing. In the wake of COVID-19, the world has started paying more attention to India. As global interests rise, International companies shift their focus from China to India.

Construction costs are also on the rise at a rapid pace. A high return on investment is likely to be achieved if all of these factors are considered. There has been a consistent pattern of high returns on real estate prices throughout history.

As long as you consider factors such as the construction of large-scale commercial and residential developments in metro areas, tier 2 and tier 3 cities, as well as factors such as investment returns in your 20s, you will be able to enjoy high returns on your investment for the remainder of your life.

Early Retirement Is Possible

In the course of your life, buying a house is a source of retirement income for many people. There is a possibility that you might be able to retire early if you can purchase a home in your 20s. In terms of investments, houses are considered to be stable investments.

It is also perhaps the most critical asset that you will ever own in your lifetime. You can ensure financial security if you own a home under your name. When the need arises for financial assistance in an emergency or uncertainty, it can prove very helpful in ensuring your safety.

The most significant benefit to buying a house in your 20s is that you feel less burdened and can retire earlier in life. For instance, if you buy a home during your 40s or 50s, you may have to postpone your retirement until you obtain a mortgage and can pay it off.

Conclusion

As you can tell by now, it is a pretty solid yes when it comes to whether or not it is a good idea to buy a house in your 20s. Investing in a home early in life is an excellent way to create wealth, pass on a legacy to your family, and create a legacy for future generations. 

It cannot be stressed enough how beneficial it is to make investments in real estate. Further, there is no reason why you cannot have access to your dream home by simply transferring the balance of your home loan to a reputable bank.

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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.

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.