High real estate prices makes it difficult to so many people in buying the house that they want, but home loans makes it easy by funding 80% of the cost on the property. A home loan is a loan which is extended to a person in buying a property. The property will be mortgaged with the bank or the non-banking financial institution until the repayment of the loan. The lender also is the one who will be holding the title deed of the home until the home loan amount will be repaid in full with its due interest in time. One could take up home loans not just for buying a property, but could also be taken for the property’s renovation or construction. Some benefits that home loans has to offer would be:
Benefits on Tax
For the case of a second house, you actually will be eligible for claiming deduction on the whole amount of housing loan interest which is going to be paid under Section 24B on the Income Tax Act.
No Prepayment Charge
Unlike other loans where the lenders are going to charge prepayment penalties on payment made for home loans, there’s going to be no prepayment penalty on floating rate home loans. Whenever you have some surplus money, you could use it to make part payment to the home loan and in lowering your burden. However, there will be prepayment charges on floating rate home loans.
Balance the Transfer Facility
For the case of home loans, you have the facility to transfer the home loan to another lender if they are going to give you loans at lower interest rates. You may even find balance transfer calculators that can actually help you for knowing how beneficial it’s going to be in transferring loan amounts.
Easy to Buy the Dream House
Making a purchase for a house through cash is not possible to a lot of people, but home loans could in fact be repaid through easy monthly installments that makes it easier in buying their own dream house.
High Repayment on Tenure
Compared to other types of loans, home loans have the longest repayment tenure which can go up to 30 years, which actually is where one may reduce the burden on the equated monthly installments by extending the tenure. Using the home loan EMI calculator would be able to help you in knowing how the EMI change when you change the home loan tenure.
Saving in Paying Rent
Renting in big cities can be expensive and could also put a strain on your monthly budget. It is the reason why it’s better when you will pay the EMI and to own your very own house.