What is right age to start buying a home?

There are several other factors like location, budget and credit history that affect your decision. When planning to buy a home there are a number of questions that come to the mind, including the right age.

Jul 18, 2016 04:07 IST CreditVidya Rajiv Raj |

Owning a home can give you a feeling of independence and freedom. However, there are a lot of things that you need to consider before you take this big financial decision of your life. Not only you need to have the money to make the down payment, you also need to make sure that you have the ability to repay the home loan EMI and to bear the additional cost of home ownership. There are several other factors like location, budget and credit history that affect your decision. When planning to buy a home there are a number of questions that come to the mind, including the right age.
 
Naresh is a manager in a big multinational company in Gurgaon. He is highly satisfied with his job and doesn’t see himself moving for next few years. In his early thirties, he is a proud owner of a three bedroom apartment in the posh area of the city. He had no other financial obligations and therefore, he repaid the home loan in 7 years. His friend Manuj, on the other hand, has to meet other financial and family obligations and he is putting off buying home since a long time.
 
There are a lot of advices coming from every direction about the age at which you should buy a house. However, there are hardly any parameters that can concretely tell you about the right age to be a home owner. Instead of the right age, you must think about the right time and circumstances to make the decision. Here are two different phases of adulthood that affects the decision of buying a house.
 
Home buying when you are young with no or little responsibility
 
When you are young, you have limited financial responsibilities. As such, you have enough income to pay for the home loan and additional costs. However, younger people often are at a transitional phase. They are constantly looking for better career opportunities. At a younger age, the probability of relocating is often higher. As such, buying a house may not be a prudent decision. Nevertheless, if you think that you have a job allows you to pay for your mortgage and any added cost, and you plan to stay for next few years, you should not put off the decision for long. Even if you are thinking to buy the house in next 2-3 years, start planning from now. Start building your credit score to avail the home loan easily.
 
Home buying when you are older with extra responsibilities
 
As you grow older your responsibilities increase, thereby increasing your monthly expenditure. Apart from that, your priorities also changes. As a young adult, you could have done with any location, but now you will want a house that is closer to your kid’s school. However, by this time, most people have a decent saving to take care of the down payment and a stable job, where they plan to stay for a longer period of time. This is a good opportunity to revisit your monthly budget to make way for the expenditure that comes with buying a home. It is also the time when you have to start monitoring your credit score carefully.
 
As you see, there is no definite answer pertaining to the right age to buy a home. However, if you want to be a homeowner, you need to plan as early as possible. It is important to maintain a decent credit history to qualify for a home loan. When you are financially stable and the circumstances and prices are favourable, it is the right time to make the move.
 
The author is Co-Founder & Director, CreditVidya.

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