Protech group in its blogs have always discussed topics that can help home buyers make strategic decisions regarding financial investments. In this blog too, we will discuss a crucial subject matter that concerns home buyers and property seekers.
Home loans today have become a basic financial tool that is explored by most home buyers. Availing home loans can not only ensure you easy liquidity in times of cash crunch but also allows you to buy your dream home without worrying about your current monetary status. It allows you to extend your horizon of financial feasibility, ensuring you get the best house as per your desire. However, while seeking a home loan it is always advisable to do your research and keep yourself informed.
In this blog, we will discuss five key points that should be considered while seeking home loans.
1. Tax benefits
A home loan can help you save money as a home loan is eligible for tax deduction under section 80C. EMI for the housing loan has two components – interest payment and principal repayment. Under various government schemes tax deduction can be claimed not only on interest but also on the principal amount of EMI. If the loan is taken jointly, then each of the loan holders can claim a deduction for home loan interest up to Rs 2 lakh each and principal repayment u/s 80C up to Rs 1.5 lakh each in their tax returns. Knowing these norms can help you plan your budget for a home loan better.
2. The Tenure of Repayment
The duration taken to fully return the loan sanctioned to the home buyer is called the repayment tenure. Longer repayment tenure results in reduced EMI amounts, however, it increases the interest paid on loan. Short repayment tenures have higher EMI but lesser interest rates. The kind of loan you opt for will depend on your budget and the return value
that will accrue from the property. If you feel that a loan tenure of 25 years suits your requirements even with the higher interest rate, you can go for it. Smaller repayment tenures also come with attractive interest rates and if you wish to make a faster repayment, the bank can help you accordingly.
3. The final amount that you will be charged.
While finalizing the budget for buying a property, one must ensure they have read the bank documents properly and have compared various offers presented by different banks and financial institutions. A home loan constitutes of EMIs, Interest that has to be paid on the principal amount, and the down payment. The larger the down payment amount the smaller will be the burden of EMI. As such, it is important to consider your current saving and future financial commitments before selecting a home loan plan. The EMI you finally settle for must be the one that can be conveniently paid every month without defaulting. Missing EMI’s increases the interest rate and puts an undue financial burden on your financial plans.
4. Foreclosure Norms
RBI norms related to the foreclosure of a loan changes from time to time and this can be a tricky part. While a homeowner may happily save money for early repayment of loans, he might meet with only disappointment as banks charge a huge amount for early closure of loans. Since 2019 RBI has barred NBFCs from implementing foreclosure charges or pre-payment penalties on any floating-rate loans. However, there are other charges such as administrative, processing, or service charges which banks may levy. As such knowing the norms of a bank related to additional charges is very important.
5. Credit score and home loan eligibility check
It is advisable to have a good CIBIL score which is more than 750 for being eligible for home loans with better interest rates. These days most banks have made it an essential requisite where home loan seekers need to furnish their credit score to the bank before applying for a loan. To know your CIBIL score you can take various home loan eligibility tests that allow financial institutes to check your eligibility based on your past credit history, the regularity of payoffs, etc.
Conclusion
As a well-known real estate developing company in Assam, the Protech group has always offered key insight on investment planning and property finances to home buyers. Protech group has been a Part of SBI home Loan Mela – 2020, where home buyers got an opportunity to browse through a range of home loan products. Our upcoming residential projects such as the Protech Paradise apartment complex at Bhagaduttapur, Kahilipara are covered under PMAY (CLSS) Govt. scheme for home loan subsidies. To book an apartment with Protech Group and avail an easy home loan you can visit www.protechgroup.in
