The home loan space is abuzz once again with lower interest rates and processing fee waivers.
There is no doubt that financial planning is key to a happy and comfortable life as one is able to provide for their family and fulfill their goals at different life stages. And an investment plan is undoubtedly the headliner as it not only protects your money, but also makes it grow over time.
The biggest question that a sound investment plan needs to answer is the ‘timing’ for making an investment especially in today’s time. The COVID-19 pandemic has not only made people realize the importance of having a contingency plan for emergencies, but also changed some other rules of the game. For instance, the whole rent vs buy debate has found an entirely new dimension. What happens if one loses their job or faces a salary cut? How would they continue to pay their rent? Having your own home in such a scenario makes a lot of sense, especially when one considers working-from-home as the new norm across industries.
Incentives for owning a home
For most of us living under-a-roof that you own is a dream come true! Buying your own home is not just fulfilling your immediate need, but it is also a good investment due to appreciation in value over time. COVID-19 has torpedoed the world in ways we couldn’t have prepared for. While most of us are prepared for a rainy day, a global shutdown was not on the list of emergencies. This unforeseen challenge has resulted in adapting to a new lifestyle. Interestingly, real estate has also slowly transformed, and has become a buyer’s market. Residential housing prices have marginally fallen in the major cities ever since the pandemic hit us, while government measures have provided financial incentives for buying ‘affordable homes’.
Recently, the Central Government allowed builders to sell property up to 20% (vs an erstwhile 10%) lower than the going (circle) rate without having to pay taxes on the differentials. In addition, low-interest rates, currently hovering near 10-year lows, have further improved affordability for those looking to buy a house in India. Furthermore, in cities like Mumbai, stamp duties were also reduced making it cheaper to own a house. Therefore, it is the right time to buy a home for yourself and your family.
How to go about the actual purchase
When it comes to purchasing your dream house, there are many obstacles to overcome. Choosing the best home loan seems to be the first and most difficult challenge. While there are several banks and financial institutions willing to approve your loan application and give you the loan, it is advisable that you do an extensive analysis and look for the right option that satisfies all the conditions and suits your budget.
To assist you in the process, here are some key factors to consider when selecting the best home loan.
Low interest rates: The interest rate is the most important aspect in determining how easy or difficult it would be to repay the loan. A higher interest rate can prevent you from accepting a larger loan or require you to choose a longer repayment period. A lower rate of interest, on the other hand, allows you to take out a higher loan and could also result in quicker prepayments. Financial institutions and housing finance companies provide various interest rates, which fluctuate over time. However, Tata Capital’s Home Loan offerings are tailor-made for purchasing a home or constructing one. Tata Capital home loans extend from Rs 5 lakh up to Rs 5 crore which start at an affordable interest rate of just 6.80 per cent! You can choose the home loan amount, tenure, and the EMI period as per your convenience.
Flexible eligibility criteria: For determining the eligibility of borrowers for a home loan, banks and financial institutions have a set of standards. These criteria vary from lender to lender. However, the criteria generally covers age, income stream, credit history and so on. Tata Capital’s easy-to-use home loan eligibility calculator lets you determine your housing loan eligibility in a quick and hassle-free way. To be eligible for a Tata Capital Home Loan, you have to meet a few basic home loan eligibility criteria which might differ depending on whether you are a salaried individual or self-employed.
Tax benefits: Tax benefits on home loans may be availed during filing of annual income tax returns. Home loan borrowers are eligible for various tax benefits. A popular one is the deduction of up to Rs 1.5 lakh from income, on home loan principal repayment as per Section 80C of the Income Tax Act, 1961. In addition, for the accrual and payment of interest on a home loan, you can claim a deduction up to Rs 2 lakh under section 24B of the Income Tax Act.
Limited incentives and schemes: The Atmanirbhir Bharat 3.0 package by the Government of India has indicated that the 20 per cent incentive for house buying up to a value of Rs 2 crore is valid only until June 30, 2021. It is very likely that the above-mentioned incentive (s) for house buying might not be extended beyond the deadline or done away with once things normalize.
Repayment Tenure: Home loans are the only loans that allow a repayment tenure of up to 30 years. Therefore, you can reduce the burden of your EMIs by extending the tenure. Use a simple online tool such as the home loan EMI calculator to know how your EMI will change with the change in tenure.
Now that you know the world of benefits around home loans, including some limited time benefits, you can take the plunge into home-ownership and begin this exciting journey. Turn to Tata Capital – as they offer customized home loans with easy accessibility, affordable interest rates, and a structured EMI period as per your convenience. And what’s more is that Tata Capital home loan processing involves minimum documentation and is easy and seamless. Moreover, the years of experience Tata Capital has in the industry makes them a reliable home loan provider you have been looking for!
Disclaimer: This content is distributed by Tata Capital. No TNIE Group journalist is involved in the creation of this content.