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The Benefits of Applying for a
Home Loan in Present Times

Introduction

You may be contemplating buying a home right now. With mass-vaccination drives well underway, the end of this pandemic is likely to occur sooner or later. However, the real estate market may take some time to return to pre-pandemic normalcy, if at all. In such times, buying a home can be challenging. Given the uncertainty about lockdowns, remote working and reduced in-person contact, it is crucial now more than ever to have clarity about home loans.

Find out how you can steer common challenges and take advantage of some of the many benefits of home loan.

1. Low Real Estate Prices

There are several options today within the affordable home segment. As a home buyer, you can either afford a larger home in this segment or purchase a home for a lower amount than you had budgeted. Else, you can take advantage of a home loan that offers tax benefits. When you pay a small amount as a down payment, you can use a home loan to pay the rest and enjoy a longer repayment tenure of up to 30 years.

2. Co-Borrow with Your Spouse For A Low-Interest Rate

Currently, the lowest interest rates on home loans are reserved for female borrowers. Hence, if you wish to avail of a low interest rate, you may want to apply for a home loan together with your wife. To rationalize the cost of taking a home loan, you can benefit from special concessions on home loan rates for women. Besides, when you have a co-applicant, it boosts the ability of your home loan eligibility. Additionally, each joint applicant can claim tax benefits too.

3. Reduced GST Rates

According to new GST rates, GST is charged at 5% on residential properties, not part of the affordable housing segment, without Input Tax Credit [ITC]. On household properties included in the affordable housing segment, you will have to pay a GST at 1% without ITC. GST on under-construction properties is 12%. Besides, GST does not apply to the sale of completed properties or the resale of old properties. Hence, take advantage of reduced GST rates to purchase a home within your preferred segment.

4. Reduced Interest Rates

With interest rates moving downwards in the recent past, home loans today have become affordable. With a low-interest rate, you can benefit from a low EMI amount over an extended tenure that can make your home loan economical and easy to repay.

With reduced social contact and increased social distancing, prime real estate vendors and builders have started introducing technology in the homebuying process. 

• Virtual Home Tours 

With online home listings evolving significantly, you can now take advantage of 3D virtual home tools, high-resolution images, enhanced shots and technological features to help you assess the condition of the house you wish to purchase. Having a realistic view of how well the layout flows can help you make a better decision to buy the house.

• Remote Closure

Reputed banks and financial lenders offer online applications, accept electronic documents, and promote remote closings to speed up your home buying process through a home loan. Today, it is no longer necessary to apply for a home loan in person but rather take advantage of online facilities to process your home loan application.

Remember to get your personal finances to get a clear idea of how you wish to fulfil your desire to buy your dream home. Here are additional tips on how to boost your homebuying process...

• Learn More About Lender Requirements

Know what it takes to qualify for a home loan as housing markets are as competitive as ever. Ensure that you have an excellent credit history with a high credit score and meet all the requirements stated by the home loan lender.

• Understand Your Homebuying Budget

Knowing what you can afford before you set your heart on a specific home is essential. Depending on your budget and income, you could decide whether you want to stretch your budget for a larger home or ensure you have more financial breathing room on an affordable home. Take into account your personal risk threshold and safety net when considering this decision.

• Compare Home Loan Offers

Tiny differences in interest rates can add up to lakhs of rupees in interest over the tenure of a home loan. And with a wide variety of home loan vendors, it can be an excellent time to shop around for a low interest rate.

• Look for a Pre-approved Offer

A pre-approved home loan offer can get you the finance for the amount you need. It can help you to close the home loan deal quickly and receive sanction before the property is finalized to help you negotiate with the seller. A pre-approved home loan is generally offered to customers based on their credit score. Hence, ensure you have a sound financial background to benefit from a pre-sanctioned or pre-approved home loan for easy loan processing.

Conclusion

Now is a good time to become a homeowner. Take advantage of the many benefits available at your disposal to help you save time, money, and effort to buy a property of your choice.

Disclaimer – ICICI Securities Ltd. ( I-Sec)

Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. Please note, loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.