Most of us aspire to own a house, and considering the current property rates, it’s no surprise that housing loans are a popular option to make this dream come true. Lenders are not far behind in terms of understanding the current demands and trends. They are going digital, and housing loan information and application are only a click away for customers.
With technology making loan applications quicker and smoother, it is more imperative than ever before to assess your options carefully before investing; after all, housing loan are typically quite sizable and entail a long repayment duration.
Below listed are four useful tips you want to keep in mind when buying your dream home with a housing loan.
- Pick a home that fits your budget
Given that a home loan can offer a large amount of funding, a common mistake many make is to choose a home that they simply can’t afford. Avoid this at all costs as it puts your financial wellbeing at risk. With an expensive, out-of-budget home, you may end up struggling to keep up with the EMIs. Ideally, you should first assess and finalise your personal needs, such as space and numbers of rooms, and with these in mind, you should start looking for properties that fit the criteria.
A helpful tip to keep in mind is that homes around the outskirts of cities are generally cheaper and may be more feasible in current times with work from home becoming commonplace. If your dream home in the city exceeds your budget, look for a similar property on the outskirts, and you’re likely to find a match with a more affordable price tag. Always remember that borrowing more than you can afford exerts a great deal of pressure on your finances.
- Assess and work on your credit profile
To qualify for a housing loan, you need to meet all lender-specific criteria. A standard requirement is that you have a good CIBIL score to qualify for funding. So, make sure you first assess your credit profile and check if you make the cut. If your score is low, lenders may still approve the loan, but you may not qualify for favourable terms. This is important and you should take the time to improve your CIBIL score before you apply.
- Consider the age of the property
The age of any property you’re interested in is important for several reasons. For one, it defines the amenities available to you and impacts future upkeep. Further, it affects the loan terms lenders offer you. The age of the property is closely linked to its market and resale value. Generally, newer properties fetch a greater sum and are a safer bet.
For lenders, the market value of a home is an important factor because it dictates the risk involved in lending. Naturally, going for older properties means you may not get access to the more favourable terms offered on newer properties. Keep this in mind before you settle on any property as even a slight difference in the home loan interest rate could amount to a hefty difference in your overall cost of borrowing.
- Learn about the home loan tax benefits available to you
When you take a housing loan, you get access to a number of home loan tax benefits. These can help you save a lot of money, which is why you should know what benefits are available to you. For most borrowers, deductions under the Income Tax Act are as follows:
- 2 lakh per year for the interest repaid, as per Section 24b
- 1.5 lakh per year, for the principal amount repaid, as per Section 80c
As a first-time homebuyer, you can claim another home loan tax benefit under Section 80EE. The provision allows you to claim an additional Rs.50,000 deduction on the interest amount repaid in a given year, provided that:
- The loan amount is Rs.35 lakh or less
- The value of the home is Rs.50 lakh or less
- The home being purchased is your first house
Besides these tips, it is also crucial that you compare housing loan offers before you apply. Home loan lenders usually have tailored offerings, and it is important that you find one that has all the features to allow for a truly optimised experience. Perks such as online loan application and details access, doorstep document-pick service, fast loan processing, and easy accessibility to customer service are some of the key things you should look for. These not only add to the ease of access but also minimise the effort required to avail the funding you need. One great option that offers all these features and more, is the Bajaj Housing Finance Limited Home Loan.
The home loan provided by Bajaj Housing Finance is loaded with features to offer a convenient, comfortable, and cost-effective home buying experience. They offer high-value loans at competitive interest rates with the option of flexible repayment tenors. You also get access to expert counsel for assistance with all home purchase dealings so you are equipped to make the right decisions. For quick and easy access to these benefits, apply online by sharing just a few basic details.
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