The amount of money that is borrowed by one party from another is known as debt. The money has to be repaid by the borrower within a specified date with interest. A home loan is an agreement between a borrower and lender where the lender lends money to the borrower so that he can buy his property. The property is kept as security for the amount of money borrowed. There are only a few people who can buy their house property without any financial aid. Let us discuss a few reasons for applying for a home advance.
Different aspects of loan
Loans for homes can last for several numbers of years. It may exceed beyond ten years. You should apply for loans and make loans for repayment in an appropriate way.
- Closure of advance by prepaying
You may go in for the closure of advance by prepaying the remaining portion of debt. You may be levied prepayment charges by the lender. It all depends on the terms of agreement.
- Opt for one with prepayment facility
If you do not want to make that extra payment, then you should opt for a debt with prepayment facility. There are many companies which do not charge anything on the foreclosure of loan.
- Capital appreciation
Investment in a real estate is a wise decision. In recent times, rents for homes and costs of construction are constantly rising. Now you may go in for a home debt by browsing online.
- Take possession of your dream home
From the comforts of your home, you may make a well-informed decision. With an appropriate debt amount, you can finally be able to possess a house property of your dreams.
Entitlement to Tax benefits
You will be entitled to certain tax benefits and can save to a considerable degree by taking a home debt. You can also claim tax deductions on the interest portion of loan. Deductions are also available for the processing fee. Visit here to learn more about it.
Rates of interest depending upon your requirements
There may be a fixed interest rate or floating interest rate associated with the home debt. A fixed interest rate is set at a certain amount and remains the same till the completion of payment of loan. A floating rate of interest fluctuates with the conditions of the market. You should opt in for a fixed or fluctuating rate depending upon your requirements.
Decision of taking a loan or not
Taking a loan on home is a huge investment decision. It is a long term plan. Most of the people make home loans for a period which may extend up to thirty years. Many of them go in for floating interest rates. It is not a wise idea to make such a major decision solely by rate of interest. Twenty years or thirty years tenure is a long-term matter, and it is impossible to predict the outcome as the rates will be subject to changes. Once you decide to opt for a home loan, you should start your search for an appropriate lender who can offer the best terms after examining your eligibility criteria.
Amila Gamage Wickramarachchi is the founder of this blog which she shares her parenting and lifestyle experiences.She is a Contracts Engineer by profession and recently launched her own Engineering consultancy service Sihela Consultants.(www.sihelaconsultants.com)