Home Loan or your savings to buy a house: Here's what you should opt for
Indian middle class is struggling to buy their dream house after moving to a new homeland for occupational purpose. While the interest rate are set to a downtrend going ahead as is widely anticipated after the dovish stance by the Fed's Chair Jerome Powell.
So, here is a revealation of how you should be going about your home purchase given the current interest rates and other constraints.
Rates may go even competitive
As per the report, a leading realtor's body has made an appeal to the centre to offer home loan up to Rs 25 lakh at just 5 per cent. This can likely be a reality as the government is also working and helping to promote affordable housing schemes.
Opting a floating rate in low interest rate environment more suitable
As the rates are likely headed southwards, going for an adjustable rate or floating home loan will be a better choice.
Home loans offered at a better and competitive rate
These loans allowing you to buy a dream home are available at a cheaper rate and experts believe the rates may trend even lower to make the purchase more affordable.
Property title and other record is also checked
Lenders while giving you a loan, before hand check for the property in transaction including its title, ownership and other integral details. So, the buyer can rest assured and be at ease about the property he or she is buying into.
Property documents will be verified
Also as part of legal verification before your home loan is sanctions, all the documents concerning the title of the property will be verified.
Home loan saves you taxes
As per the current tax regime, under section 24(b), you are allowed a deduction of up to Rs 2 lakh every fiscal year on interest repayment. While, Rs 1.5 lakh principal repayment qualifies for deduction as part of Section 80C.
If home loan is taken in joint name or two borrowers have taken a loan
In such a case, both the home loan applicants are eligible for tax benefits and can together save up to Rs 7 lakh in taxes.
Additional financial requirements can be met via the top-up route
For additional financing requirements that may arise during the tenure of your home loan, top-up on a home loan can be a better and most cost-effective choice.