6 Home Loan Tips for first-time Buyer

A home loan for a first-time buyer offers several advantages. They can benefit from additional tax benefits on the interest repayment and principal amount of the loan. Additionally, home buyers can enjoy a reduced Goods and Services Tax (GST) rate from 12% to 8% if they purchase their house under the credit-linked scheme of Pradhan Mantri Awas Yojana. Moreover, you may also qualify for an additional interest subsidy under this scheme if your loan tenure is 20 years or more.

TIPS FOR FIRST TIME HOME LOAN BUYERS

Here are some key home loan tips you should keep in mind that could potentially affect your loan approval process.

Planning Your Loan Amount

You might have your heart set on an apartment close to your workplace, but the high prices could significantly strain your finances. Therefore, it's essential to narrow down your choices based on your budget and adhere to them. By doing so, you can also ensure that your finances remain in good shape.

Accumulating The Funds for A Down Payment

Financial institutions play a vital role when it comes to acquiring a housing loan for first-time buyers. However, it's also important to note that these institutions only finance a portion of the loan amount. The home buyer must pay the remaining amount as a down payment. A larger down payment would not only decrease the loan amount but also alleviate the EMI burden.

Knowing The Basics of The Loan

Before you apply for a home loan it is important to have a look at a few fine details such as the interest amount, the tenure of the loan, any additional benefits and the eligibility criteria for the loan. After this make sure to keep all related documents readily available as this would smoothen the approval process. Make sure to conduct a comparative study to avail the best deal possible.

Applying for a Pre-Approved Loan

A pre-approved loan is a letter of sanction provided by a financial institution, which specifies your eligibility to receive a home loan after validating the documents provided by you. The sanction letter is valid for 6 months, within which you need to submit your loan application. A pre-approved loan helps first-time home buyers determine their budget for the property and facilitates them in arranging the necessary funds to pay the down payment amount, which ultimately reduces the EMI amount.

Choosing Institution Approved Projects

Opting for a property approved by a financial institution ensures it is devoid of any legal issues. Typically, financial institutions grant loans after conducting a thorough verification of the property's documents and obtaining necessary approvals from authorities, thereby mitigating the risk of fraudulent schemes.

Knowing The Tax Benefits

For first-time homeowner loans, understanding the full extent of tax deductions available through their initial home loan is vital. Home loans can significantly reduce tax liabilities, making it imperative for buyers to claim all entitled benefits when filing their tax returns.

CONCLUSION

Understanding the basics, planning your financials and taking advantage of tax benefits are crucial steps in attaining a first-time buyer loan. And by carefully considering these key recommendations, you can successfully navigate through the complexities of purchasing your first home more effectively, ensuring a smoother transition into homeownership.