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Ever imagined living in your own apartment that overlooks the sea or has a backyard or is in plush high-rise and just right then reality kicked in? Very often that’s how the story goes. For most of us, owning a home is a dream we work toward turning a reality. And that dream we will help you realize.

Home buying can be a long drawn process. Hence Research Thoroughly. Most days you will tire yourself after simply cruising through property advertisements or with house hopping. But to clinch the best bargain in the primary (new) or secondary (resale) market, it is a crucial commitment you’ve got to make for a year or even two.

Property prices are going through the roof and if you plan on taking financial assistance from a bank or the market Start Young. It is advisable you pool in at least 40 percent of the property value from your pocket rather than succumbing to EMI pressures later. One prudent way to do that is by Investing in Mutual Fund Systematic Investment Plans specifically to make payment for your home loan down payment. Investing INR 10,000-15,000 per month for 5 years at ~12% per annum will help build up a good corpus. And if you continue with that you will comfortably be able to pay your future EMIs, which brings you to the next pertinent question you need an answer – What’s your loan appetite?

Your net monthly income decides how much loan you can afford to take. Lenders also take into account your income from other sources and other loan repayments that may be due for payment. Home loans, although an expensive affair, make homebuyers eligible for certain tax exemptions under Section 80C of the Income Tax Act. As for FY18-19, first time buyers can claim tax deduction of up to INR 2 lakh on interest and INR 1,50,000 (INR 2 lakh for senior citizens) on principal. Under Section 24, you can claim deduction against the interest amount that you have paid on your residential property during the pre-construction period. Tax rebates of up to INR 2 lakh of interest payments are also available for second homebuyers. Needless to say, all tax exemptions come with conditions attached.

Under Credit Linked Subsidy Scheme of Pradhan Manthri Awas Yojana (PMAY), Urban  Middle Income Group beneficiaries with annual income of above Rs 6 lakhs and up to Rs 12 lakhs would get an interest subsidy of 4% on a 20-year loan component of Rs 9 lakhs. Those with annual income exceeding Rs 12.00 lakhs and up to Rs 18 lakhs would get interest subsidy of 3%.The benefit of this scheme is available till March 2019.

Home buying is a big decision and an even bigger investment. But with interest rates low ~ 8.4 % presently, it may be a right time to take a step toward living your dream because we all know… home is your happy place.

By Anantya N.

Posted: May 2018

 

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