Why Buying A Home Early Can Be A Great Decision

There has been a remarkable change in trends in India as far as ownership of property is concerned. Earlier, people would opt to live in a rented home even as they strived to save enough money to purchase their own home; the new generation is doing just the opposite. At a time when paying monthly rent for an accommodation is almost the same as monthly instalments for a home loan, young Indians are choosing the latter. Apart from being able to live in your own home, this also gives you an option to sell or rent out the place in the future. Experts agree that buying a house early can help you make a well-planned long-term investment decision.

However, the decision to buy a home is one of the biggest investment decisions you make. Consider the points above before you take the plunge:

Added responsibilities

Turning into a home owner can bring about a lot of changes in your life. You will have to control your monthly expenses and start planning your savings. However, with banks providing tailor-made EMI (equated monthly instalment) options according to individual needs, owning your own home by taking a loan can actually work out cheaper than renting out.

Tax benefits

You get to enjoy tax deduction benefits against the interest paid on home loan (not applicable for an under-construction home). Also, under Section 80C, your tax deduction against principal repaid also increases substantially.

Future perfect

Having a property in India provides a hedge for the future, since you can enjoy good appreciation, if you want to exit the investment. Also, since home loans are for a longer period, the earlier you start, the earlier you finish with repayments.

Check it out

There are a few things that you must ensure before you make your investment decision in property.

Location: For a salaried individual, the biggest risk after buying a home is the chances of getting a transfer to another city. Investing in a good location will ensure that you get to see a good appreciation in case of a resale.

Safety issues: An easy way to address concerns on safety is to invest in a good neighbourhood. If you are travel frequently or keep late hours at work, you might find it better to live near family or relatives who can keep an eye on things while you are away.

Space requirements: Buying a residential property is a long-term decision which cannot be changed in a hurry. Make a checklist of all your space requirements such as number of rooms, storage options, etc, to accommodate changes in your family size in future.

Credit worthy: Before approving a loan, banks ensure that your credit history is good. For a young buyer who has minimum financial obligations, your chances of getting a loan are better. Make sure you do not default on your vehicle loan or credit card.

Count each penny: Buying a home entails planning your monthly incomes and expenses, so that you can pay the interest on the home loans with ease. There should also be a cushion for a situation that calls for unplanned expenses such as a medical emergency.