Home loans have become a common aspect of the home buying process. Most buyers prefer a home loan to purchase the house of their dreams. While the loan is accessible easily, there is a set of home loan eligibility criteria that you are required to fulfill before availing of the funds. One of the primary criteria is your age.
Lenders offer home loans to borrowers up to the age of 65 or 70 years. Your age determines the loan amount and the repayment tenure. The older you are, the lower the loan amount and the shorter the repayment tenure. That is why, when you are availing of a home loan after 45 years of age, a few tips can get you the best deal. Have a look at what these tips are –
- Get a co-borrower, preferably younger
Having a co-borrower or a joint applicant increases your home loan eligibility. It is because the eligibility of the co-borrower gets added to yours and the collective qualifications make it easier for the lender to offer the loan.
Adding a co-borrower can also help you avail of a higher loan amount at favorable interest rates. Moreover, if the co-borrower is young, especially in his/her 20s or 30s, you can even get a longer repayment tenure despite your age.
- Make a larger down payment
Since the amount of loan is restricted at higher ages, it is preferred to make a larger down payment. When you are 45+ years of age, you might have accumulated savings over your working life. Use these savings to make a larger down payment on the loan so that your debt burden is limited, and you can even repay it within the repayment tenure hassle-free.
- Use the step-down EMI facility
Under the step-down EMI facility, the EMIs get reduced in the later years of the repayment tenure. The EMIs are higher in the initial years, which helps you pay off a large part of the debt quickly. After this, the EMIs get reduced, easing your repayment burden.
Step-down EMIs are recommended for older borrowers because it helps them minimize their debts as they approach the retirement age. So, use the home loan EMI calculator to find the EMIs that you would be comfortable paying initially, as well as in the later years. So, talk to your lender and choose the step-down EMI facility.
- Opt for a mortgage insurance cover
Under home loans, lenders usually insist on a life insurance cover with the loan. The cover ensures the repayment of the outstanding loan if the borrower passes away during the repayment tenure.
In your older years, the coverage becomes all the more relevant. So, opt for a mortgage redemption life insurance cover, so that your liability is paid for in the case of any unfortunate event.
- Close other existing debts
If you have existing debts to your name, close them before you apply for the home loan. Existing debts, coupled with your age, would restrict the loan amount that you can avail of. So, paying them off is a better alternative.
- Shop around
Different lenders have different eligibility parameters as well as home loan interest rates. So, do your research. Shop around and compare the loan options across lenders so that you can pick a lender offering the desired amount of loan at the most competitive interest rates.
Getting a home loan after 45 years of age is not impossible. Home loans are available for older people too. Moreover, if you use the tips mentioned above, you can get the best home loan, which is affordable and allows you to buy the home of your dreams.