Scroll down to find out the best way to decode home loan jargon, how using a home loan calculator can open up a world of exciting home loans with industry-best interest rates and understand why a home loan is the best option for a first time home buyer.
Factors to be Considered While Buying a House
People invest in a property as it secures their future. Hence, you need to prepare in a way that a home loan serves all your purposes. The complexity of buying a house can be reduced by keeping these factors in mind:
- The Size of the House
The size would depend on the number of people in the family.
- Purpose of Buying the House
You must consider the purpose for which the house is being purchased- self-use or putting on rent.
- Floor Rise
Generally, a higher-floor apartment would have a higher value in Mumbai and lower in Delhi, when compared to the lower floor numbers. Also, corner flats are sold at a higher rate.
- Type of House
This is the most decisive factor. Decide whether you want to buy a studio apartment or an independent house.
- Amenities
You may need a swimming pool, gym, community centre or a garden with the house you buy.
- Location
The location of your house is quite important. Are you looking for a home in proximity to the office or school? Or are you looking to live a little away and would want to move to the suburbs?
Answering the above-mentioned question can enable you to fine-tune a home loan calculator to show you the best home loan interest rates.
What Makes a Home Loan the Best Option for a First Time Home Buyer?
- Low Rates of Interest
Interest rates apply to all loans. Home loans come with a lower interest rate as compared to other loans. The floating rate of interest for a home loan is hovering around 9% at the moment. The borrower’s eligibility is checked by the lender before the approval of the loan.
- Fixed or Floating Rate of Interest
As a borrower, you may choose either a fixed rate of interest or a floating one. A fixed rate remains the same throughout the loan term, while the floating one change according to prevailing market interest rates. You may calculate the exact amount by using a home loan calculator.
- Higher Loan Amount
Home loans usually cover around 75 to 90% of the total cost involved in purchasing a house. You may receive up to 90% of the property value if the property is less than worth INR 30 lakhs.
- Small Downpayment
Generally, lenders require you to pay only 10% of the loan amount as upfront fees. This payment can be increased if you are looking forward to a subsequent decrease in your home loan interest rate cost.
- Tax Benefits
When you apply for a home loan, you become eligible to claim a deduction of up to INR 2 Lakhs on interest payments. By using the provisions of Section 80C, you can also claim a deduction of INR 1.5 lakhs on principal repayment.
- Conclusion
Home loans can give you financial backing if you are planning to buy a home for the first time. The challenge is to find a home loan lender who would efficiently handle your queries and give you a deal that fits in your budget.
Read More: 10 important tips before taking a Home Loan
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