Buying a house is not just a worthy investment, but it is acquiring an asset with appreciating value. But with the ever-escalating prices of properties, most potential buyers turn to home loans to fulfil their dream. Though many people approach different lenders to buy a home, most of them don’t know the benefits of buying a home through a home loan.
Potential buyers only consider home loans as an option to acquire their dream home. But they do offer several benefits.
Check out the post to know the advantages if you are planning to apply for a home loan –
Lower Interest Rate
The rate of interest for a home loan that one needs to pay is quite lower than any other type of loan available. In case a borrower finds himself/herself in a financial crunch situation, one can easily avail a loan to supplement the existing home loan at a lower rate of interest in place of a personal loan to resolve the situation.
One of the biggest advantages of home loans comes in the form of tax benefits. You can ask for an income tax deduction on the interest and principal payments. The borrower can claim up to 1.5 lahks on the principal repayments under Section 80C, up to 2 lakhs on the interest repayments under Section 24B and 2 lakhs on interest reimbursement in extraordinary conditions under Sections 80EE, 80 EEA. One can also claim up to 1.5 lahks on stamp duty expenses under Section 80C. Well, this could be big and great for saving a lot of money.
Multiple End Uses
Another important benefit of availing a home loan is that you can have multiple end-users. One can apply for home loans to purchase any given property, of course, the price of the same should be within our loan amount limit.
One can use the loan to buy a piece of land, construct a new house on the land, purchase a brand new, buy under construction property or a brand-new home. You can also make use of the funds to renovate or remodel your home.
Due Diligence on a Piece of Land
Buying a new house is an important decision in one’s life, and you certainly don’t want to have one without verifying all the legalities. When you apply for a home loan through banks or through any other lending institutions, they do an extensive range of legal research work on the property.
The authorities cross-check whether or not all the paperwork done is legitimate. This due diligence conducted by them helps in lowering the possibility of being a property fraud. You can rest assured that the property you plan to buy is good to go, and you are safe.
Choose Interest Type
When it comes to home loans, you can choose between fixed as well as floating interest rates. If you choose a fixed-interest loan, the EMI remains the same throughout the loan tenure. Contrariwise, if you choose a floating rate of interest, the EMO depends on the applicable interest rates in the real estate market. In a market where the demand for home loans is quite low, choosing floating interest might help reduce the EMI amount significantly.
So now that you are aware of the benefits of having an ICICI bank home loan or from any other lending institution, you can use the same to secure your dream home. You should also research before finalising the lender to get the best deal.