Owning a house is the biggest dream a person can have, and it is probably the biggest financial decision that you and your family members will ever make. It is an important milestone to achieve, and having a place of your own gives a sense of identity, and it remains sacrosanct forever.
Having the ownership of a house is equivalent to have those blissful little moments of joy, comfort, pride, and of course, time with your family. It is probably the right time to purchase a house, and it does not necessarily have to be hard on your pocket. You can apply for a housing loan and claim the ownership of your dream house.
Benefits of applying for a home loan
There are numerous benefits of Muthoot housing finance like tax benefits, lower interest rates, capital appreciation, etc. The underlying advantages can further clarify the perks of home loans.
- Tax benefits
To encourage the general public to buy their own houses, the government of India has issued tax deductions on the principal amount and the interest paid on the home loan. A deduction of up to Rs. 1.5 lakh is permitted under section 80C of Income Tax of India 1971 act and up to 2 lakhs on the interest portion of home loan under section 24B of Income Tax of India Act.
However, the tax deduction is subject to the completion of the construction of the house. Any claim of tax deductions while the property is under constraint will be denied.
- Zero repayment charges
The best part is that whenever you have surplus money, you can use it to pay the loan amount. Unlike other loans where borrows have to bear penalties for making payments, you have all the freedom to pay any time you want.
- High loan tenure
One of the advantages of availing of housing finance is that there is higher loan repayment tenure. You can reduce the burden of equated monthly installments by paying the loan amount from 3 to 30 years.
4 points to consider before applying for a home loan
If you are applying for a home renovation loan for the first time, it is crucial to research well in advance. It is a long-term commitment and requires you to understand all about housing finance.
- Eligibility criteria
Before applying for a home loan, it is important to understand whether you are eligible or not. Lenders usually assess the eligibility criteria based on income and repayment capacity. To avail of a home loan, the applicant needs to be:
- An Indian resident.
- Must be minimum of 21 years old at the time of application.
- Must be under 65 years of age at the end of the loan tenure.
- Should be either salaried or self-employed
- Must have a bank account.
- Research well on the type of loan you can avail
Floating rate loan in which the interest rate is linked to the lender’s benchmark rate. Changes in benchmark rate reflect on the interest rate. Whereas in a fixed-rate loan, the interest rate is fixed at the time of taking the loan and remains through the tenure, and combination loans are where part of the loan is issued at a fixed interest rate and part at a floating interest rate.
- Get the housing finance preapproved
Getting your home loan pre-approved by the lender helps decide the exact budget you need, and also searching for your dream home can be easy. It also assists in negotiation better on the price and closing the deal faster.
So, check with your lender about the properties approved by them and if you find your home, you won’t have to provide a lot of documents to the lender.
- Know the documents required
The documents required for a housing loan can be in three categories:
KYC Documents: It includes the identity and address proofs such as a valid passport, voter ID card, Aadhar card, etc.
Income Documents: It includes salary slips of the last 3 months and in the case of a self-employed person, income tax along with computation of income of the last 3 years would be required.
Property Documents: These documents include the agreement to sell the property and the title deeds.
Owning a house bestows the most fulfilling experience in one’s life, and housing finance is probably the best way to purchase your dream house. However, always factor in eligibility criteria, loan type, loan preapproval, and documents required before applying for a home loan.