Top 8 Mistakes You do While Buying Home at Your 20s
Home Loan Rates EMI 2017 176 views
Most us want to own a property and start our background work at the age of 20s itself. Earlier, those who were staying in rented properties start thinking to buy a property after the age of 40 years. Now, the situation has changed, people start working at early age and gain the purchasing power. Some of them even take home a hefty pay cheque every month. This bulky pay package encourages them to make small and big purchases even when they are in their early 20s. Even some of them are more eager to buy a property at this early age.
This is really a good decision to start building your equity and diverting your funds into real-estate to get right kind of returns on your investment. But, at times you might land into a foul curry if you will not make this buying decision consciously. It is not simple to purchase a property. As most of the youngster believe that everything is possible in this fast-paced life with their knowledge and there is nothing to do with experience in buying a property. It is not very much true. Buying a property is a long-time decision and involves a lot of money, so you are not supposed to make any mistake in making the decision. You should not make a decision in a hurry or ignorance. Here are some common mistakes, you do while buying a property at your 20s.
- Not consulting family member before finalising the property: This is a very common mistake that most of the people do at this age. They assume that they are mature enough to make all kinds of decision, which also include the biggest purchase of their life. Buying a home is a big time decision and you should always consult your family members before making a purchase. After all your family members are going to stay there with you, they can guide you better about the future family requirements. Therefore, taking help of your family members before buying any house or property is always better.
- Not searching well: As you are earning well, you have enough funds to make that big purchase, you can invest a good money to buy a house. All this sounds really nice! But, all your funds will be wasted if you invest your money in a wrong property or any project, which will not give you the same returns as you are expecting. It is really necessary to search well and get all information about the property before investing your hard-earned money.
- Taking help of real-estate agents/consultants is outdated thing: This is another notion of young people as they believe that real-estate agents or consultants are not meant for them. Moreover, these people will fool you and ask for higher charges for their services. This is not true in all the cases. These people are experts of their field and well-aware of the properties of that area. They can easily tell you about the advantages and disadvantages related to a location or property. So, this is not a bad idea to consult a real-estate agent or consultant before buying a property.
- Not considering the future in mind: When youngsters buy a property, they consider their present picture in mind and buy a property. They hardly think about the future perspective and their future liabilities. This way, they end up buying a property, which will not be as good as they assumed at that time. They might face issues related to space, locality, connectivity and not able to cope up with the financial liability with other monthly expenses.
- Taking a joint loan: Taking a joint loan is not a bad idea to increase your loan eligibility. But, this idea might prove fatal to you with different future scenario. For instance: you have taken a joint loan from a bank with your spouse to maximize the benefits of sanctioned amount. But, after two or three years when you plan a family and your wife decided to drop the job for better upbringing of your kid. In that situation, your double income will turn into a single income with more add-on financial liability. It will increase your financial burden and you will be badly trapped in loan. Therefore, take a joint loan only if you are very sure that you both are going to work at least till the loan last or you know that you are going to get good hike in your salary with affecting your overall budget.
- Not negotiating the property price: This is another big mistake done by most of the people in their 20s. They think that negotiating the price with anyone is not a good practice. They just close the deal with property dealer on the same price quoted to them. In most of the cases, if these property agents find that you are a serious buyer and really looking for a property to buy they will reduce the price upto 10% based on your negotiation skills and interest in the property. It is recommended to negotiate with the dealer as much as you can.
- Not comparing the rate of interest: A bank representative contacted you regarding the home loan. He discussed all the terms and condition related to the home loan with the rate of interest. You signed the documents without asking much about the policy terms and condition. You even don't bother to compare the rate of interest with other banks. Different banks charge different rate of interest from the customers. So you should always compare the rate of interest before finalising a bank. This is a common mistake people do in their 20s that they make decisions in a hurry without comparing different aspects and benefits.
- Taking the loan for the longer term: If you are in your 20s with minimal family and financial responsibilities then taking a loan for longer period is not the right choice. You should borrow the loan for a shorter duration and try to hit the principal amount faster to close the loan sooner. Let's take an example, if you are just 25 years old and taken the loan for maximum 30 years then you will be debt free in your mid 50s. But, in another situation if you are just 25 years old and taken the loan for 15 years you will be debt free at the age of 40. This way you will have enough time to save the money for other future family responsibilities.