One of the biggest acquisitions in one’s life is to buy a house. Now-a-days, people within the age group of 30-40 years start looking to purchase their own homes. Some are inclined to make a purchase even before they get married. Well I must say, earlier this decision is taken, the better it is. Buying a home comprises of two broad steps: identifying the right property and acquiring a home loan. Here, we will talk about the second one i.e. acquiring a home loan.
The Home Loan is an interesting product that not only enables you to fulfil your dreams but also lets you enjoy tax benefits. It is important to look for a house which is truly worthy of you, where you may spend time with your beloved collecting some of the most valuable remembrances.
The True Worth is referred to a house that matches your social standing and reflects your way of living. Here I would like to share an interesting video by Aditya Birla Finance Home Loans on this topic. #TheHomeLoanIDeserve
A home loan is taken by individuals who are looking for or have already selected the property of their choice. Once you are through with your search, it time to approach lender with your financials and photocopies of property documents. The assessment is been done on both sides.
While these institutions review your financials, there are certain broad parameters which are assessed, such as:
1. Minimum 20% contribution from your side.
2. Your steady income to conveniently cover your EMI after your household expenses. You may check you EMI with the help of calculator available.
3. A good CIBIL score that means you should have a good track record on your previous loans say car loan, business loan or personal loan.
4. Transaction history of your bank account to reflect your financial independence.
5. You may club your spouse income to increase your eligibility making her or him as co applicant.
6. If you own a business, then the lender may also seek financials of your business for last 2-3 years.
Similarly an assessment is made for property documents also that involves
1. Clear Title in terms of ownership in seller’s name
2. Clear chain of title that signifies that property was transferred in seller name through a legal set of documents. It is indeed helpful for you also as it safeguards you from frauds or disputes.
3. Clear dues from all Govt bodies/authorities with no issues.
4. A map or well defined location and address to remove any ambiguity about the same.
Once these requirements are met, the loan gets approved and you may seek disbursal at the time of registration.
Remember, you need to provide your contribution to the lender or furnish the receipt for the money paid towards your minimum contribution of 20%. The lender will print a cheque in the Seller’s name, which will be delivered to him directly by lender’s representative, after necessary registration formalities.
Tax Benefits of Home Loan
You can also expect tax benefits with a home loan.
As per tax laws, any interest paid towards home of self-occupied property is exempt up to 200,000 per year and the principal repayments are covered under section 80C. This means once you start staying in the house you bought, your entire EMI (if up to 29k per month) or most part of EMI (if exceeds 29k per month) will be tax benefitted.
How to Choose a Lender
While choosing a lender, it is important to look for choices. It is not necessary that banks are offering the best rates. There are home loan finance companies that offer competitive terms along with handholding during the entire process. It remains a misconception that the interest rates are higher with institutions other than banks. The actual scenario is that banks are finding a tough competition from them with comparable interest rates and far higher flexibility clubbed with service approach. Be sure to check out what Aditya Birla Finance Home Loans has to offer.
Summing up, the home loan is one of the important ingredients in one’s financial life. So, fulfil your dreams by taking the full advantage of this product and at keen note of what colours you would choose for the walls and where you would hang your photo frames in your new home.
