Millennials are reducing the down payment through LTV to buy a bigger house, you can also adopt this method – News18

New Delhi. Due to work from home in Corona epidemic, space has to be taken out for office at home. Hence, Millennials (people in the age group of 25 to 45 years) are now pushing for buying a bigger house. To meet this demand, a new trend of reducing downpayment by managing Loan-to-Value (LTV, LTV) has emerged.
According to a new survey by real estate platform NoBroker (NoBroker.com), more and more companies are getting used to the employees working from home and many of them have adopted the hybrid model. Hence, Millennials are buying bigger houses with cheaper interest rates and longer tenure loans. For this they are keeping more LTV. NoBroker has surveyed more than 1200 home buyers.
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31 percent want 15 year home loan
According to the survey, 31% preferred home loan tenure of 10-15 years. The reason for this is that due to the longer duration, higher LTV is being available. You can buy a bigger house with less downpayment than this. At the same time, 24% of the respondents have preferred a period of more than 10 years. About 65% of these millennials are in IT services while the rest are either self-employed or in government services.
How LTV determines home loan amount
LTV (Loan-to-Value) and foreclosure charges are the most important factors with the lender bank in deciding the home loan amount. LTV means what will be the maximum loan amount on the total value of the property you are buying? The higher the LTV, the lesser the down payment will be. With this, you can buy a house with a higher cost. EMI increases due to lower downpayment, but this can also be reduced by increasing the loan repayment tenure.
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Number of home buyers increased from 49 percent to 63 percent
According to the survey, now the number of home buyers has increased by 63% which was 49% a year ago. Data from NoBroker has already shown that the sales for the first quarter of 2021 performed better as compared to the first quarter of 2020. Bangalore and Chennai have seen a sales jump of 41% and 47% respectively while Hyderabad has seen a 52% increase in sales. Mumbai and Pune are the leaders in sales with 86% and 83% more transactions as compared to Q1 2020. Delhi-NCR is also not behind with a jump of 34%.
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LTV increases the overall ticket size of purchase
Amit Agarwal, CEO and Co-Founder, NoBroker.com said, “The average age to buy a property has dropped and more and more Millennials are buying their first home. They prefer LTV to a higher level because it increases the overall ticket size of purchase. This is why apart from the high LTV interest rate, it has emerged as the most important factor for Millennials in choosing home loan lenders.

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