Living in our own homes with our happy families is a dream of all of us. The most significant advantage of a home mortgage is that you can obtain the best home loan at cheap interest rates when compared to other types of loans. The Indian government has been recently motivating the citizens to invest in real estate. Due to this reason, the government has also enabled tax benefits on home loans. You can actually save your money on taxes by obtaining a home loan. 

We’ll go over some of the most important advantages of a home loan that you can reap the benefits of below.

No prepayment penalties

Unlike other loans, where lenders levy prepayment penalties on payments made toward a home loan, floating rate home loans have no prepayment penalties. In the case of a floating rate house loan, however, there will be prepayment penalties.

Balance Transfer Facility

If you have a home loan, you have the option of transferring your loan to another lender if he offers you a better interest rate.

Appreciation of Assets

The potential of mouth-watering capital appreciation is the most compelling justification for buying a home for each of us who has witnessed property prices rise dramatically over the last five years. Rents appear to maintain pace with inflation, making a home one of the few long-term investments that can protect you against inflation.

Interest rates are low.

Purchasing a property is a long-term investment that can last up to ten years, with loan rates fluctuating. As a result, you can rest assured that dropping rates will benefit you at some point in the future.

Interest paid as a tax benefit

While computing the income from house property, a deduction of up to Rs. 1.5 lakh can be claimed under Section 24(b) of the Income Tax Act, 1961 for the entire interest payable on the home loan for the acquisition or construction of the property.

The interest payable in the pre-acquisition or pre-construction period would be removed in five equal annual installments beginning in the year the house was purchased or built.

Principal Repayment is a tax benefit.

The principal repayment on your house loan up to Rs. 1 lakh would be recognised as a deduction from your gross total income under the newly enacted Sections 80C read with Section 80CCE of the Income Tax Act, 1961, subject to the fulfillment of certain conditions.

Ensures The Safety Of The Property

Buying a house is a once-in-a-lifetime investment, so you’ll want to be sure the property you pick is free of legal issues. Obtaining a home loan might be really advantageous in this situation. When you apply for a home loan, the lender will do a thorough research of both the builder’s and the property’s reliability. They’ll look over all of the paperwork to make sure the structure is legal and that the builder has obtained all of the required clearance certificates from the local authorities.

Furthermore, the lender will ensure that the property is clear of legal concerns. As a result, you won’t have to go through the time-consuming paperwork yourself because the lender will handle it, and if the lender approves the loan, you’ll know the property you want to buy is safe.

Final Thoughts

The housing loan makes owning a home more affordable for the ordinary middle-class salaried worker. House loan applications are approved or denied in India based on the claimant’s credit score and ability to repay the loan. You will obtain the best home loan interest rates based on these factors.

If you have a consistent source of income and the ability to afford the EMIs, lenders will approve your application quickly.

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