Applying for a home loan at 45? Here's how you can make it work financially

Purchasing a house is a big step and a substantial financial commitment when a home loan accompanies it for 15, 20 or 30 years. To take up such a commitment, you need to be sure of your cash flow today. With better opportunities and an increased pay scale, many young professionals take home loans in the early days of their careers to opt for a longer tenure, resulting in a lower EMI. However, not everyone prioritizes that. Some buy a house late in their career as they look at a retirement home.
However, the problem with applying for a home loan after 45 is the availability of a maximum tenure of 15 years, implying higher monthly installments. Now, if you are 45 or older and planning to buy your first or a second house for retirement, here are a few things to help you find the best deal.

Compare and choose your lender wisely

There are a plethora of lenders available in the financial services market. It's crucial to make a proper assessment before settling on one. You must consider all the parameters before selecting a suitable lender. When you are availing of a home loan at 45, even a 0.5 percent difference goes a long way. For example, the monthly EMI for Rs 50 lakh for 15 years at 7 percent per annum is Rs 44,941, and at a rate of 7.5 percent, your EMI is Rs 46,351.
You need to access the credibility of the lender, the ability to guide you to a suitable home, and other flexible repayment options. Also, opt for one who can keep the paperwork to a bare minimum.

Increase your eligibility through joint home loan  

Opting for a joint loan with your spouse or your working children can help increase your loan eligibility. It becomes strenuous to manage the high EMIs as you have borrowed very late. So, opting for a joint home loan will make it easier to manage EMIs. Even though you might be earning a larger salary which makes it easier to manage your EMIs but with a joint home loan, you can reap additional tax benefits than in the case of a single applicant loan.

Increase Your Initial Down Payment   

When you are 45, it is assumed that you have saved up a good amount. You can use this savings to increase your initial down payment proportion, thereby decreasing your loan amount and monthly EMI. For example, for a loan of Rs 75 lakh for a tenure of 15 years with a down payment of Rs 20 lakh, the loan amount to be processed will be Rs 55 lakh. However, with a down payment of Rs 10 lakh, the loan amount processed will be 65 lakhs. When you opt for a larger down payment, do keep in mind not to over-stretch yourself. You must be careful not to use all the funds and keep aside a certain amount for an emergency.

Go for the maximum tenure

Usually, the maximum tenure for a home loan can go up to 30 years. But it is applicable only if you are availing of the loan in your twenties and thirties. If you are applying for a home loan at 45, and your retirement age is 60, then your maximum tenure is 15 years. However, if you have a good credit score and steady employment, you will be able to convince your lender to extend your tenure beyond retirement. It is always better to stick to the maximum tenure the bank offers and not extend the same to avoid paying EMIs into your retirement.