Owning a home is a dream of many people. It is a source of anxiety and frustration. It is difficult to buy a house with our entire savings. So, we choose the home loan option. Usually, a home loan is the biggest liability. It considers the large amount and long period involved. But home loan offers some benefits.
Table of contents
- Advantages of home loans:
- High loan value
- Multiple end-users
- Choice of interest type
- Tax benefits
- Minimum prepayment charges
Advantages of home loans:
High loan value
Banks offer to finance 70% to 90% of the value of the property as a home loan, depending on the city or state of your residence. The rest amount you pay is a down payment.
We can apply for a home loan to buy any property we like. For instant, we use the loan amount to buy land, construct a house on our land, or purchase a pre-used or under-construction property. We can use a home loan to renovate our homes too.
Choice of interest type
With home loans, we choose fixed or floating interest rates. If we choose a fixed-interest loan, the EMI remains the same throughout the loan period. If we choose a floating interest loan the EMI changes depending on the applicable interest rates in the market real estate. When the home loan demands are low, your floating interest on your home loan EMI may be low significantly.
We have tax benefits of up to INR 1.5 lakh on the principal amount under section 80C of the Income Tax Act,1961.
Minimum prepayment charges
In-home loan banks do not take any prepayment charges. Prepayment is only applicable when we want to close our loan before the repayment period or we choose floating-interest home loans.
Home loans are benefits for buying a property. But before applying for home loans from banks it is important to see the interest rate and the loan tenure. Choose the low-interest rate and convenient tenure. Visit https://openplot.com/ for more details.