Want a home loan at 45? Here’s what you can do

There is more to buying your dream house than taking a home loan and repaying the principal and interest over a fixed period of time. A home loan — often one of the most important decisions in an individual’s life — can be stressful and exhausting if the applicant fails to do proper research and read the fine print before signing on the dotted line.

With a range of options available in the market today, it has become relatively easy to avail of a home loan at attractive interest rates.

But what happens if you decide to take a home loan much later in life? This is significant because as you grow older, it gets slightly difficult with housing finance companies imposing certain restrictions.

For example, if you are in your 20s or 30s, you get a home loan for a maximum period of 30 years. You can comfortably repay the loan during your active working life.

But if you take a loan in your 40s, then you have to repay it over a shorter tenure of 15-20 years or till you reach retirement age.

In the absence of a regular income, you may find it difficult to repay your balance loan amount. Some housing finance companies do extend the period beyond the age of 58 or 60, depending on your paying capacity and creditworthiness.

If you are in your 40s and in need of a home loan, you could ideally take a loan jointly with your working spouse, son or daughter as co-borrower.

This will ease the process in many ways. For instance, if your wife is younger than you and both of you earn a good income, then your chances of getting the loan are that much brighter. Your wife can continue to repay the loan after you retire. In fact, you may be entitled to a higher home loan; perhaps, even a second one.

In case you are not in a position to take a joint home loan, then the next best thing would be to reduce your EMI by paying a larger down-payment on your chosen property.

This will lower the EMI, including interest component, and enable you to easily repay the balance loan over a short tenure.

There is a third option. You can repay the outstanding loan on your retirement with your gratuity, bonus or inherited money.

This will lower your financial burden and leave your long-term savings intact, which you can then use in your post-retirement years.

Given the number of home loan products in the market, nothing will work in your favour more than your own research and understanding of home loans.

Find out what works for you and what won’t. Pay close attention to product features and benefits such as eligibility, tenure, interest rates, payment flexibility, hidden clauses, and transparency. Above all, assess the company’s reputation and credibility, its ability to guide you through the process and sanction the loan quickly and efficiently.

If you take these simple but important steps, then applying for a home loan at 45 will seem as if you are taking it in your 20s or 30s.

(The writer is Executive Director and Business Head, PNB Housing Finance)