The most basic needs of a human being are Food, Clothing, and Shelter. As the world around us evolves, our lifestyle evolves with it, and we are no more content with the basic fulfillment of the above needs. Shelter, especially, has evolved from protection from the elements to having a luxuriant home with all the amenities. This lifestyle is possible in luxury flats in Chennai, but affordability becomes a key factor in the decision-making especially in first-time buying. This is where Home Loans will help you attain your dream home.
At first glance, a home loan might look like an overreach, and many people would advise that paying rent is far better than getting saddled with a home loan. This is because most homebuyers don’t have a proper understanding of how a home loan works to your benefit. We hope this article helps clear your hesitations about getting a home loan.
Buying a home is one of the biggest financial investments you will make in your lifetime. But this is not an investment where you have to wait for years for it to mature. You can enjoy the fruit of it immediately in the form of your dream home. The lifestyle you wanted is made affordable by taking a sensible loan from a reputed national bank. You can take advantage of the access and opportunities that the home and the community will offer you right away. This also secures the future of your next generation.
In a city like Chennai, property rates are always appreciating. So the sooner you get on the wagon the less you will have to pay. Construction costs have gone up by 15% every year, and the rent slabs have also increased with it. The property you wanted might even go out of your price range in the next year or two while you wait to make a commitment. A home loan helps you take advantage of the property market at the earliest possible time.
A home loan helps stretch your financial commitment over a period of 10 years or longer. This way you don’t feel the burden of assimilating a huge amount of funds within a short time. Think of it as paying rent to yourself. The interest rate of a home loan keeps fluctuating and you will surely benefit from the falling rate, while the elevated rates are barely significant.
In the case of a sustained period of low interest, you could also end up prepaying the loan and making the house truly yours. In the past 25 years, home loan interest rates have fallen from 18% to around 7.5%, while the property value increased considerably. If you are a new borrower, banks also give attractive interest rates.
Tax Benefits of Home loan:
The home loan tax deduction has been increased from Rs.30, 000 to Rs.1.5 lakhs. As per Section 24(b) of the Income Tax Act of 1961, a deduction of up to Rs.1.5 Lakhs can be claimed towards the total payable interest on the home loan. The interest for the pre-acquisition period would be deductible in five equal annual installments calculated from the year of sale.
There is also the newly introduced Sections 80C and 80CCE, of the Income Tax Act of 1961, where the principal repayment up to Rs.1 Lakh on the home loan, will be allowed as a deduction from the gross total income subject to fulfillment of prescribed conditions.
Buying Vs Renting:
When it comes to choosing between buying and renting, our advice is to buy. It is always beneficial in the longer run. Rent in Chennai is anywhere from Rs.10, 000 to Rs.25000 a month. You might as well pay the same amount towards your home loan, and live in your own home. You can buy the home, rent it out if you are not in a position to move in right away, and can use the rent to pay back the loan. As the years go by your rental income will increase, but the home loan repayment would be about the same or even lower, helping you profit from the appreciation.
When availing of a mortgage loan, the banks will perform a thorough audit of all the legal documents including those of the developer or seller. The loan will be approved only if the legal documentation is without any dispute. If you were prepared to buy a home without a loan, there is almost no way for you to investigate the authenticity of the seller’s documents. You are saved from the potential hassle of verifying the property before buying.
Lifestyle Housing is a well-known brand name for Luxury Flats in Chennai. We have 4BHK apartments in Chennai in various prestigious locations that will give you a lifestyle upgrade. We are also partnered with reputed national banks, to help get your home loan processed easily.