Buying a home could be one of the biggest achievements of a person's life. In most cases, it takes an entire lifespan to fulfil the dream of purchasing one's own home. Selecting the ideal property involves a lot of research and planning. Arranging funds is probably the toughest and the trickiest part of the process.
You could dip into your savings for the entire payment or decide to get a Home Loan at a good interest rate.
A decade or so earlier, borrowing from a bank used to be a cumbersome process but today financial institutions have simplified the entire Home Loan application and disbursement process. All leading financial institutions offer Home Loans with attractive interest rates, flexible repayment periods, quick turnaround times and unique product features.
Before finalising on a lender, one must understand the intricacies of a Home Loan.
How should I compare what each bank is offering me? Is there anything in the fine print I should be worried about?
Benefits of Availing a Home Loan:-
- An accomplishment - Every individual dreams of owning a house in their name. A home loan allows you to accomplish this feat and realize your dreams. This is one of the biggest financial investments you make in your lifetime and can therefore be considered an accomplishment.
- Capital appreciation- Land is an appreciating asset in most cases. Construction costs have also increased over the years. As rents get more expensive with inflation, investing in your own house can shield you from inflation.
- Benefits in interest rate- In the 90's, banks used to charge up to 18% interest on loans. Today, you are able to get a home loan at 8.40% annually. The decrease in the interest rates coupled with capital appreciation makes it a dual benefit plan.
- Tax benefits- The Government of India has played the biggest role in boosting the home loan sector. As per Section 24B of the Income Tax Act 1961, you get a deduction of 2 Lakhs towards repayment of interest towards loans availed for purchase/construction of house (if you or your family is living in the house). At the same time, Section 80CC read with Section 80CCE of the Income Tax Act 1961 allows for a tax deduction up to 1.5 Lakhs on repayment of principal amount of the home loan. This is one of the greatest incentives for people to opt for a home loan, even if you are able to afford to buy your house with your savings