If you consider the huge amount involved and the long tenure to repay it back, you may feel that home loan is a liability and stick to your rented house. But if you know about the advantages of buying your home by taking a loan, you will surely consider of availing one. You may argue that that the purchase of a home is a source of anxiety, but then it is also a huge accomplishment. With the ever rising prices of real estate, homes are getting dearer by each passing day. It is now impossible for one to buy a home with their savings only. So, taking a home loan is the only viable option to own your dream home.
Appreciation Of Capital
It is true that buying a home is perhaps the biggest investment that you will ever make in your lifetime. So, it gives you a sense of accomplishment along with the sentimental value attached to it. Also, with the booming real estate market, investing in a home is the best and most safe method of capital appreciation. If you consider only the construction cost, rates have skyrocketed within the past few years resulting in an increase in rent also to keep pace with the inflation. Given the situation, investing in a home is the best way and has great prospects to protect you from inflation in the long run.
Low Rate Of Interest
As home loan have a long tenure, sometimes even fifteen years, there may be several ups and downs in the rates of interest within that period. You can avail the benefits of this falling rate too at some point. You may decide to prepay your loan even during such fall in interest rate and own your home. And as the price of a property rises steeply always, this can have a dual benefit for you. So, if you manage your loan properly, you will be benefited in ways more than one. There are banks and lenders that offer better rates for new borrowers too.
Avail Tax Benefits
If you take a home loan in Mumbai, you can also avail tax benefits. They are the primary advantage of taking a home loan. There are two kinds of tax benefits calculated on the basis of repayment in the principal amount and another on payment of interest. Though there some ceiling, tax benefit on principal repayment allows you to avail benefits on the actual sum borrowed. This benefit can be doubled if you make your spouse the co-applicant for the loan. Interest payment benefit is on the interest on the amount which you have borrowed.
Good Credit History
If you have a home loan, it helps you to build a strong credit history as well. Though it is a debt, it is considered as a good debt since it is attached to a tangible asset. You can see the increase in your credit score within a year or so if you make timely payments to your home loan in Mumbai. It will tell on your loan eligibility and represent you as a financially responsible person to a lender, whom you can approach for any further credit.