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Home Loans; Safeguarding Your Interests


Home Loans; Safeguarding Your Interests

Last updated: November 2 2015
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  • Home Loans; Safeguarding Your Interests

    Well, property purchases have always placed banks at the epicentre, with buyers wanting to stretch their buying capacities or simply make up for deficit amounts. However, there is also a very important aspect involved; safeguarding your interests!

    A bank can help in:

    Identifying and Verifying the Builder’s Credentials:
    Well, the prime objective, or we can say concern, of any buyer has always been and will remain to be the authenticity of the builder and the documents procured. A home loan promises an increased level of safety and the buyer is also spared of the hassles involved in the diligence required to be carried out with regards to the title and other documents involved. As the property is meant to be a collateral, the bank ensures that no legal aspect gets overlooked. To be precise, it is their investment in a way and they wont mess it up for anything.

    Evaluating the Market Value:
    Apart from verifying the credentials of the builder the most important aspect that a bank considers is the market value of the property being financed. It has to, in all scenarios, loan a property which promises appreciation in value. Hence the appreciation aspect is worked out well in advance.

    Tax Benefits
    There can be some significant tax benefits also as the loan repayments enables the borrower to avail tax deductions from the total taxable income. The EMIs also qualify for the same (principal and interest amount). Various sections of the Income Tax like 80C and 24(b) entitle the borrower to a tax deduction of up to 1.5 lakh a year for the interest paid. In case of an under construction project and partial disbursement of loan, tax benefits can be claimed, though there are no tax deductions until the possession. It also amounts to deduction on stamp duty and registration charges. There is a special tax deduction for first time home buyers with a purchase of houses under Rs 40 lakh and a loan amount of Rs 25 lakh or less (the loan should have been sanctioned between April 1, 2013 to March 31, 2014). Similarly, in joint home loans, both the borrowers can avail tax benefits and the maximum tax deduction available to a single borrower is 1.5 lakh, which applies to each borrower respectively. Hence the total deduction would amount to a maximum of 3 lakh.

    A lot more can be claimed according to the provisions currently in effect.

    Hence, it is beneficial if you avail a loan, no matter how small an amount. It is for your own benefit to bring in another partner in the deal who can premeditate all unforeseen circumstances. You can always prepay the loan amount once you see through the deal without any hurdles.

    P.S. Though incidences of banks associating with defrauding builders get reported every now and then, it is still one of the best medium to lay your bets on.

    Joyful Buying!
    Last edited November 2 2015, 05:25 PM.
    Talk TRUE; Talk IREF
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