It is not uncommon for home ownership to be the equivalent of a milestone in many cultures. Buying a dream home is a big problem, but it is not everything. However, people of all ages and backgrounds believe that their greatest achievement is buying a dream home. Although millennials do many things differently, they seem to agree with previous generations about home ownership. However, millennial women are breaking the glass ceiling by owning houses, unlike the previous generation, where the majority of the owners were men. Most millennials are also pushing to own a home before their 30s, raising serious questions about buying a single-income home.
In countries like India, where marriage is a necessary social institution, joint ownership is very common. However, millennials have dramatically changed the landscape, and with it, individual home ownership has also started to rise. You can buy a home on a single income for a number of reasons. The buyer may not be married, the buyer may be sure to buy a home on their income alone, the buyer may want more independence in the property, the buyer’s family has a source of income, or simply because they want it to be owned by only income. Whatever the case, buying a home on a single income can be a daunting and intimidating affair for some. But with a little financial planning, owning a single-income home is a great possibility, even if you’re buying your first home. Tips to help you with the money
- Work on your credit profile
When you apply for a home loan, you need to make sure you have a good credit profile. Do not make expensive purchases (> 65,000 rupees) before applying for the loan. At the same time, it would be unwise to cancel credit cards before applying for the loan, as this can shorten the life of the credit. Lowering your credit limit would be a good thing to do.
- Get an insurance protection plan
In the unfortunate event of unemployment, accident or death, you and your family will need financial protection that can cover your loan. There are short-term and long-term annuity plans that provide protection against unforeseen events that can lead to default on individual income investments.
- Find a guarantor for your loan
A guarantor sign can help you close the deal on your home loan. Although you are not required to obtain a home loan guarantor, a third party guarantee helps speed up your loan process. But before finding a guarantor for your home loan, understand the risks involved. Once the guarantor signs on his behalf, he is responsible for repaying his loan and his eligibility for the loan is drastically reduced. Immediate family member is the guarantor in many cases.
- Save for your down payment
In India, the government allows a loan of up to 80% maximum, which means that you will have to pay 20% up front at your home. If you are hoping to buy your dream home, it is wise to start saving early, however even saving 20% is significant and not always practical. But there are other ways to secure a down payment on a home loan. Read on for more information:
- A loan from your employer
Obtaining a loan from your employer for the down payment is very possible and a simple process at that time. It is a much easier process to arrange a down payment from the employer, considering that they have a guarantee of your salary.
2. Gold loan
One can easily mortgage their gold for instant down payment loans on the house. With many private institutions willing to pay money for gold, a gold loan is one of the fastest ways to arrange an advance.
3. Home Down Payment Loans
As an extension of the gold loan, some institutions provide the down payment. The home loan is offered at 11% interest for 12 to 60 months against gold.
- Choose the perfect EMI plan for you
Now this is perhaps the most important aspect to consider when applying for a single income home loan. Carefully consider how much you will be able to pay on your home loan each month. Ideally, your home loan should be 40% of your net income so your family can run smoothly. If you have other sources of income in addition to your monthly income, consider increasing your EMI for a shorter loan term. Remember also that the ideal term for a mortgage loan is between 15 and 20 years.
It would be wise to pay attention to changes in home loan policies, fluctuations in interest rates, and any government exemptions.
Whether your home receives a single or double income should not be a deciding factor in owning a home. There is a home for every income bracket, as long as you educate yourself well on what will be right for you.