A Home Loan Guide for Novices
Loan against property from HDFC Ltd offers a higher loan amount at an attractive interest rate. Avail loan against a residential or commercial property now
Loan against property from HDFC Ltd offers a higher loan amount at an attractive interest rate. Avail loan against a residential or commercial property now
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A <strong>Home</strong> <strong>Loan</strong> <strong>Guide</strong> <strong>for</strong> <strong>Novices</strong><br />
For someone who is looking to buy a property, home loans is an intelligent option in India. It<br />
gives you ownership of the house in easy installments plus it gives you certain tax benefits.<br />
Owning a house is a major decision both financially and emotionally. Purchase of real estate<br />
after all is an investment, giving you good returns in the long run. For this you must choose the<br />
right type of home loan with the best offers and interest rates. There are certain facts about the<br />
Income Tax Act in India you should be aware of as well.<br />
Housing finance can cover the following - purchase of land, renovation, extension and<br />
construction. The following are different types of loans banks in India offer:<br />
1. <strong>Home</strong> Purchase <strong>Loan</strong>: This is the commonly sought loan. It is used when you buy a new<br />
apartment or house.<br />
2. <strong>Home</strong> extension loan: This loan can be taken up when you need to extend your current<br />
apartment or house further like <strong>for</strong> example, an extra bathroom, another room etc.<br />
3. <strong>Home</strong> construction loan: This is taken up when you want funds to construct a new home on<br />
an existing property. This loan can sometimes be confused with <strong>Loan</strong> against property but you<br />
should know that the terms and conditions of this loan are very different from purchase loans.<br />
4. <strong>Home</strong> conversion loans: This loan is used when you want to want to move to a new home<br />
and need the extra funds <strong>for</strong> it. This eliminates the need of prepayment of the previous loan.<br />
5. Bridge loans: This is <strong>for</strong> that time when you are selling the old house and buying a new<br />
house. The loan amount helps you to buy the new house while you are waiting to sell the old<br />
home.<br />
6. <strong>Home</strong> Improvement loans: This loan is opted <strong>for</strong> when you are looking to get some<br />
renovations done in your house. Repair works are also included in this loan.<br />
The tax benefits of loans in India:<br />
It requires a huge sum of money to buy a new home. To make the financial burden lighter on<br />
the common man, the Government gives some tax benefits on home loans. Here are a few<br />
things you should know about them:
1. Purchase loans and construction loans can attract tax benefits. The interest as well as<br />
principal components get these benefits.<br />
2. Repair of property is also eligible <strong>for</strong> interest deduction.<br />
3. Any home or construction loan taken on or after April 1st, 1999 is eligible <strong>for</strong> deduction of up<br />
to Rs.1.5 lakhs. Be<strong>for</strong>e that date, Rs. 30,000 is deducted.<br />
4. The deductible can take place only once the house has been constructed or bought. It can<br />
take place as five installments. It takes place over five years. The first one is deductible in the<br />
first year the construction is finished.<br />
<strong>Home</strong> loans - The situation in India<br />
There are more than a few banks offering home loans in this country. Depending on the EMIs<br />
you can make your choice. There is quite a competition between lenders. You can apply online<br />
as well as offline <strong>for</strong> the home loan.<br />
[Source: http://ezinearticles.com/?A-<strong>Home</strong>-<strong>Loan</strong>-<strong>Guide</strong>-<strong>for</strong>-<strong>Novices</strong>&id=6829991]