Where everyone dreams of owning a home, the high price of real estate comes as a hindrance in the path of buying it. Some consider buying homes a lifetime achievement, whereas other treats it as security for the future. Since home-buying includes a hefty amount of finance, it needs extensive planning to make such an important decision.
A home loan comes as a real saviour for those who take a lifetime to buy a single home. Since the lending organizations provide almost 80% funding of the property’s cost, it makes the borrower’s job easier through the loan repayment period.
Some might consider taking home loans an overwhelming decision, although it is the most efficient way to make funding for fixed assets. A home loan provides lots of benefits so that homebuyers can flourish in the distant future. Take a look at some of them:
- Helps Enhance Credit Score
With the timely payment of Equated Monthly instalments (EMIs) on your home loan, you can widen the path to having a great credit score, thus improving your overall creditworthiness. Once you can make a good impression on your lender by maintaining a good record, they will always want to provide you with finances for purchasing other loans.
- Saves From Paying High Rental
In metropolitan cities, staying in a rented house seems too costly to live on a monthly budget. Therefore, financial experts find it practical to take home loans and pay for living in your own house.
- Makes Buying a Home Easier
For many, buying a home with their own money seems impossible. Carrying the expenses of a family in this highly inflated economy puts a great strain on the earning member. For them, a home loan is a great helping hand that helps them fund a great percentage of the overall home cost. It becomes easier for homebuyers to make the instant down payment of the rest of the cost and repay the whole loan amount every month in easy instalments.
- Allows Enjoying Tax Benefits
To motivate people to buy a house, the government has decided to deduct tax on the principal and interest disbursed on housing loans. Under the Sec.24 of the Income Tax Act, 1971, a homebuyer can get up to Rs. 2 lakh tax deduction on the interest of Home Loans for a self-occupied house in a calendar year. Remember that this tax deduction is valid only for the constructed house.
- Benefits From Capital Gain
You can enjoy the increased asset value of your investment property over time.
- Zero Scarcity of Funds
There’s no doubt that buying a home in India is extravagant. Even if you have access to the money, financial experts recommend not investing in home buying. Emergencies can emerge at any time in anyone’s life. Thus, it’s not worthwhile to freeze the hefty cash amount in the property purchase.
Since home involves a significant amount of investment, it’s hard to reimburse in a short period. Never expect a similar return as you can get in mutual funds. Here, the availability of additional cash refers to diversifying your financing while maintaining its liquidity.
In the chase of owning a dream home, it is better to reckon on a home loan to get the assurance of enjoying countless advantages.