December 7, 2020

A Home Loan That Suits Your Needs

A Home Loan That Suits Your Needs

A Home Loan That Suits Your Needs

In this article, we are looking for different types of home loan that suits your needs and requirements.

A home loan, also known as a mortgage, is money borrowed by an individual, usually from banks and companies that lend. The borrower has to pay the loan amount with interest in easy monthly installments or an EMI period which can vary between 10-30 years depending on the nature of the loan.

There are different types of home loan options that suit each unique situation. You can take a loan to buy a property that is either commercial or personal. Also If you are confused about which mutual fund is best then here you get the solution.

Here are some different types of home loans are given below:

  • Home purchase – You can buy any house or house which is within your budget
  • Construction – You can use this loan to cover the costs of building a home.
  • Land Purchase Loan – You can utilize this advance to purchase a real estate parcel
  • Home Improvement – You can use this loan for renovation and improvement of your house
  • Home Repair Loans – Pay for the Cost of Repair and Restoration of Your Home
  • Home Extension – Use this loan to increase the amount of built-up space on your house.

Tax saving through a home loan

The interest charged on a home loan is tax-deductible, which means that you can claim the expenses while filing income tax.

What if you can’t repay the loan?

When you take a home loan, the bank or financial institution accepts the property you purchased as security. This means that it retains the legal right to property in the event of non-payment.

Factors when applying for a home loan

Principal

This is the amount you will borrow from a bank or financial institution.

Period

How long will you keep paying the loan? Depending on the nature of your expected income, you can choose a period that suits you.

Interest

Banks or financial institutions charge interest for their money lending services. The rate of interest depends on the amount of principal and the period for which you will be repaying the loan.

EMI amount

You will pay monthly installments for the term of your loan, until the end of the loan term. With each EMI, you will pay more of the principal, and the cost of interest will gradually decrease.

Benefits of taking a home loan

Buying a house is a big step. It is a source of anxiety, frustration – and a great sense of accomplishment. With the SBI savings account interest rate of zooming property, it is difficult to buy a house solely through our savings. Almost all of us need to take a home loan.

Generally, home loans are one of the largest liabilities. Including a large amount and long tenure, however, your loan also gives you some benefits. The write-up below highlights the advantages of taking a home loan.

Sense of accomplishment

Purchasing a house is one of the greatest monetary ventures you can make in the course of your life, And it’s not a result of nostalgic worth. The amount that most of us sink into our home is the largest component of our investment portfolio!

Capital appreciation

For each of us who have seen property prices soar over the last five years, the biggest argument for the possibility of getting a mouth-watering house to buy is. Construction costs alone, which account for more than 70 percent of the cost of the flat, have increased at a rate of 15 percent annually over the past decade. Inflation also persists with inflation; Building a house out of some investments can help you avoid inflation for the long term.

Fixed home loan

A fixed house loan is a loan where the interest rate is fixed for a fixed period of time, typically between one and 15 years.

The benefit of a fixed rate is that you know exactly how much your payment will be for a certain period of time.

There are some disadvantages to fix that you need to be aware of. Some products do not allow you to pay extra, or provide tools such as an offset account to help reduce your interest, while others provide you with a fixed-term expiration date.

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