Home loan Guide for Beginners

                                 

The customer who is planning to purchase a property or home or flat, then for these people home loan is the best option for having the property.  It not only helps the customer in buying a home but also give tax benefit to the customer. Purchasing own home is one of the main decisions in one’s life. The person must choose right dealer for getting the best deal for the home loan. The person can take a home loan for various reasons: for renovation of the house, for extension of the house, for buying the house or plot, for construction of the house, etc. Therefore, there are various types of home loans, these are:

1.      Home purchase loan: For purchasing the home or plot. It is commonly required home loan.

2.      Home Extension Loan: It is avail for the extension of the existing home, i.e. to make new room, kitchen, etc.

3.      Home Construction Loan:  It is avail for constructing the house.

4.      Home Conversion Loan: It is avail when customer wants to move in other home and existing home loan going.

5.      Bridge loan: This loan is avail when the customer wants to sell his previous house and want to purchase a new home. The person purchases a new house with this loan and is waiting to sell his old or previous loan.

6.      Home Improvement Loans: This loan is avail when the customer wants to renovate his house or to repair his house.

Tax Benefits

The purchase or construction of the home or plot involves an immense amount of money. To light the financial burden of the people government has given tax rebates on the home loans that are:

1.      The home loans attract tax benefit, i.e. the customer gets a tax rebate on the principal amount also as well as on the interest amount.

2.      Repairing of the property also attracts tax rebate.

3.      The property, which is purchased after 1stapril, 1999, attracts tax rebate up to Rs.1.5lacs and before that Rs.30000.

4.      The person can take tax rebate only after purchasing or fully constructing the house.

5.      The person also gets tax rebate u/s 80C of the income tax act up to Rs.1lac.

The borrower can avail this home loan from private or national banks, financial institutions, housing finance companies and NBFCs. The person loan amount depends upon the person profile, i.e. creditability, repaying ability, income and on the property value, as banks provide loan up to 85% of the cost of the house. The person can apply for a home loan through online mode or offline mode. The person should choose take wise decision while choosing the loan provider, as it will impact the person financial budget.