So you’re planning to buy your own Home in 2023
That’s quite a New Year resolution and I am happy for you for the fact that you’re taking this huge step that will lead you to a life of autonomy and happiness.
Owning your own home always beats living on rent. While all may seem rainbow and sunshine there are some things that need to be taken into account especially if you’re taking a home loan to buy your own home.
But you don’t need to worry at all, keep reading this post because by the end of it you will learn the 10 important things that you need to take into account before applying for the Home Loan.
So without further ado let’s get started!
1. Credit Score
The credit score is one of the most important and essential factors that banks consider before providing any loan to their customers. So, somebody who wishes to avail home equity loan has to maintain a decent credit score because it is a necessary demand to use for any reasonable loan among the banking sector. Shreeji Lending Home Loans takes this factor under due consideration before providing home loans so as to prevent the repercussions that may follow.
So, it’s important to possess a CIBIL score of over 750 to be able to avail of a home loan and earn higher interest rates on your home loan. Maintaining a good credit score isn’t powerful and may be done by creating timely payments for your credit cards and existing loans without fail.
2. Income Proof
Income Proof is a basic requirement that banks or any financial lender looks into before that provide you a home loan.
An income proof will be your Last three months regular payment Slips, half-dozen Month Bank Statements for checking Regular credit of income as supported by salary slip or ITR. regular payment Slips & regular payment ITR for Salaried People. Business ITR for Businessman. Just in case of ITR, 3 years ITR is needed & a loan will be given to support the typical income of the past 3 years as mentioned within the ITR.
3. Processing Fees & Other Charges
You need to pay 10,000- 30,000/- for Processing Fees if you are applying for a Home loan. There can be some different charges along with this. So, don’t apply home in multiple places. you have got to try to do an inquiry of the higher than things before applying for the home equity loan.
4. Registration Charges & Stamp Duty
While creating a Down Payment, don’t forget about expenses to be barred on stamp duty & Registration Charges. you have to pay 6-7% of the Sale Agreement quantity as revenue enhancement (6%) & Registration charges (1%). These Rates are as per geographical region State.
5. Floating Rate of Interest
Always select Floating Rate of Interest for Home Loan as this may provide the advantage of lower home loan rates. conjointly check whether the bank motor vehicle reduces the house loan rate otherwise you need to fill the small print in a very type & experience the bank in conjunction with some fees for reducing the home loan.
6. Tenure of your Home Loan
Your EMI is supported by Loan quantity, Loan Rate & Loan length. If the Loan Amount is higher than Loan Duration is additionally higher if you retain the EMI low. However, if your loan amount is low then keep the EMI high (if you can) so your loan duration will be less. try and Keep Loan Duration as low as possible.
7. Tax Benefit
For Home Loan, you may take advantage of revenue enhancement paid up to 1.5 lakhs u/s 80C of revenue enhancement Act. For Principle reimbursement, you may get a profit up to 1.5 lakhs u/s 80C of the revenue enhancement Act. For Interest Repayment, you will get benefit up to a pair of lakhs u/s twenty-four of the revenue enhancement Act.
8. Joint Home Equity Loan
While Applying for a Home Loan, Apply for a Joint Home Loan because it will provide the benefit of a Lower Rate of Interest if one in every one of the persons is female. You each get benefit Tax for Principle in addition as Interest Repayment within the revenue enhancement Act.
9. Additional Interest Benefit u/s 80EEA
If you have taken a loan between FY 2021 to FY 2023, the revenue enhancement is below forty-five hundred thousand & it’s your 1st house then might} get to boost the Interest reimbursement advantage of 1.5 lakh in the revenue enhancement Act.
10. TDS on Sale of Property
1% TDS to be subtracted by the customer of the property if the Sale Agreement quantity may be above fifty Lakhs. The buyer & seller ought to agree that this TDS amount is a part of the Sale Consideration. (& will be) as a result of the vendor may incur financial gain whereas commercialism the house. A merchant can get this TDS amount as a refund if his total income isn’t taxable.
Bonus. Prepay the Loan
Try to Pre-pay the loan as & after you have liquid funds so you’ll be able to save the extra Interest payment on the home equity loan & can end your loan earlier.