What are the tax benefits on a home loan section 24 for FY 2023–24?

 

Tax benefits you must consider while taking a home loan!

Purchasing a home involves a huge financial investment that requires adequate financial planning. However with careful planning, one can avail several redemptions while making the most of the benefits offered by the government and loan sanctioning authorities to save on their loan amount.

Here’s a quick understanding of the available tax benefits on home loans.

A person applying for a home loan is eligible to apply for exemptions under Section 24b, Section 80C and Section 80EEA with exemptions totalling up to ₹5 lakh.

Explore here — https://www.joyvillehomes.com/tax-benefits/

What are the tax benefits on a home loan section 24 for FY 2023–24?

Section 24(b) offers income tax rebate on home loans but only on the interest part of the loan. This rebate is also applicable if you have taken a loan for home construction or renovation. Here it is important to note that the property must be used for self-occupation or rental purposes only. The deduction is calculated on the pre-payment charges and processing charges you pay to your lender.

If you have rented out the purchased property, you can claim a full interest payment deduction. However, if you have occupied the property, you can claim deductions only up to Rs. 2 lakhs per financial year.

One must note that this benefit is valid on the condition that the construction of the project is completed within a specified time frame.

How much tax can you save?

The amount of tax you can save on a home loan depends on factors such as the loan amount, interest rate, and individual tax slab. Generally, borrowers can avail of deductions of up to Rs. 2 lakh on the interest paid under Section 24 if they have occupied it.

Under the Income Tax Act, a home buyer can claim deductions under both these sections at the same time which enables one to maximise their benefits. While Section 24 allows deductions on interest payments, Section 80EE offers additional deductions specifically for first-time homebuyers meeting certain conditions.

Once you have a clear understanding of the deductions you are eligible for, you are equipped to make a prudent decision concerning your next home purchase. Financing your dream home is easier when you are aware of the applicable charges while purchasing your home.

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Originally Published at - What are the tax benefits on a home loan section 24 for FY 2023–24?

When do home loan EMI payments start?

 

Taking a home loan to finance your housing dreams is a common practice across India.

Loans provide you with the money required to own property in your name.

While some pay the amount upfront, others remove home loans as a means to finance their dreams.

Once one decides to take a home loan, a common query that arises is knowing the tenure of repayment and its commencement date.

Typically, lenders offer a grace period known as the moratorium period before the EMI payments begin. Borrowers are not required to pay any amount in this period.

The moratorium period varies from three to six months and depends on factors such as the borrower’s profile, the lender’s policy, and the loan amount.

Once the moratorium period ends, the lender is required to start paying the EMIs before the due date each month. Each EMI comprises of a part of the principal amount taken as loan in addition to the interest payable on your loan.

While the EMI amount remains unchanged, the composition of the same varies throughout the duration of the loan. During the initial period, the interest payment component is higher and closer to the completion of the loan tenure, the the principal repayment component of your EMI is higher.

EMIs on home loans are affected by the tenure of the loan taken. Simply said, the longer the loan tenure, the lesser the EMI to be paid. A longer duration of a home loan allows you to pay your monthly EMIs without it being a burden on you. Whereas a shorter tenure helps you pay off your loan faster with lesser interest being accrued.

Banks typically offer a loan amortization schedule that helps you analyse and prepare your loan repayment schedule to ensure a seamless loan repayment. So to effectively repay your home loan, borrowers should be aware of their monthly repayment capacity in order to determine an ideal loan tenure.

In conclusion, a housing loan has several benefits and drawbacks, however based on your credit standing capacity one can choose the right loan amount and amoritisation schedule suitable to them. To know more, visit https://www.joyvillehomes.com/ today.

Originally Published at - https://industryupdates.medium.com/when-do-home-loan-emi-payments-start-d3f21aac3ee8

How to reduce home loan tenure by increasing EMI?

 

Home loans are financial tools that enable people to realise their aspirations of becoming homeowners. While these loans give you the money you need, managing them can be difficult because of their lengthy terms and the significant interest they accrue. However, there are practical methods that borrowers can use to shorten the loan term and save money.

The Importance of Reducing Loan Tenure: 

Reduced loan terms are essential for several reasons. First, it enables you to get out of debt faster. Second, you can save money by taking out a loan for a shorter period and paying less interest over time. Borrowers can achieve full homeownership more quickly and feel financial relief by implementing strategies to shorten the loan term.

Increasing EMI Payments: 

One of the most effective ways to reduce loan tenure is by increasing your Equated Monthly Instalment (EMI) payments. EMI is the fixed amount you repay every month to the lender. You can expedite the repayment process and minimise the overall interest burden by paying a higher EMI.

Suppose you have a home loan of Rs. 50,00,000 with an interest rate of 8% for a 20-year period. The accurate monthly instalment, known as the Equated Monthly Installment (EMI), for this loan, is approximately Rs. 41,753.

Now, let’s consider that you decide to pay an additional 1% of the loan amount every month, which amounts to Rs. 418 per month. By making this extra payment, you have the potential to reduce the loan tenure by five months, bringing it down from 240 months to 235 months.

Use this tool to claculate –https://khatabook.com/calculator/loan-tenure/

Please note that these calculations assume that the additional payment is made consistently every month, and they are approximate values. The precise impact of extra payments on loan tenure may depend on specific loan terms and conditions.

More Ways to Reduce Loan Tenure: 

Borrowers also have more alternatives to shorten the loan term apart from increasing their EMI payments. 

Refinancing the loan is one of these techniques. Refinancing allows borrowers to benefit from cheaper interest rates given by competing lenders, effectively lowering the total interest paid throughout the loan.

Prepayment of the debt is another approach to think about. You can pay the principal in one lump sum if you have extra money, which would lower the overall debt. As a result, the tenure and interest payment reduces.

A balance transfer is a third option. When borrowers move the balance of their outstanding loans to a different lender with better terms and conditions, there can be more benevolent payback conditions, lower processing costs, or lower interest rates. Borrowers may be able to shorten the tenure and pay less interest overall by choosing to transfer their debt.

Tips for Choosing the Right Home Loan and Lender: 

It is crucial to assess several aspects to ensure the best loan and lender when considering a home loan. You can use the following to make an informed choice:

• Compare different interest rates: Compare and analyse the interest rates provided by various lenders to find the best offer.

• Understand your alternatives for loan terms: Examine whether it would be feasible to choose a shorter loan term from the start to reduce your interest payments.

• Explore prepayment fees: Find out the prepayment charges imposed by lenders. To have the freedom to shorten the loan term when you have extra money, choose a loan with lower or no prepayment penalties.

• Consult a professional: Consult with mortgage brokers or financial consultants who can offer professional advice and assist you in navigating the complexity of home loans.

Shortening the loan term can be a wise financial move that might result in more savings over time. Borrowers can reduce the loan term and pay off their debts sooner by raising their EMI payments, looking into refinancing possibilities, considering prepayment, or choosing a balance transfer.

Before selecting the ideal house loan, it is necessary to review the terms and conditions of several lenders. Borrowers can more easily attain their goals of becoming homeowners by putting these tactics into practice and making well-informed judgements.

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Originally published at http://realestateandepc.wordpress.com on June 22, 2023.

What are teaser loan rates charged by banks?

 

Banks are constantly trying to offer the most competitive rates on their lending services in the current financial landscape. For home buyers, this is a welcome opportunity to get the most beneficial home loan option possible. Anyone on the hunt for this excellent home loan rate may have heard of a ‘teaser loan’.

So what exactly is so unique about this offering?

A teaser loan is any loan that offers customers an impressively low-interest rate for a fixed initial period of the loan tenure. After this period, a higher interest rate is effective for the rest of the tenure.

Banks offer this proposition as a great incentive to attract borrowers for all kinds of loans, including personal loans, car loans, or home loans. The main goal is to get customers to avail of the loan at an attractive initial interest rate so that they are then willing to lock in the later increased interest rate.

For instance, if a homebuyer chooses to avail of a home loan with a 30-year tenure at an 8% interest rate, the bank can then offer this customer a teaser loan where they only have to pay 6% interest in the first three years. From the fourth year onwards the interest rate will switch back to 8%. 

Adjustable-Rate Mortgages (ARM) are one of the most common teaser loans available. This home loan has a fixed interest rate for a short initial period after which the interest rate is applied to the outstanding balance. This is reset periodically, either at yearly or even monthly intervals.

The important thing for customers to understand here is that these teaser loans require a level of discretion and must be considered with the full context and not just the initial attractive offering. Asking questions and evaluating all the complexities of the loan will help to decide if the rates are really a good deal based on the customer’s specific needs and situation. 

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Joyville Howrah

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Joyville Gurugram

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Originally published at http://realestateandepc.wordpress.com on May 11, 2022.

How to Get Mortgage in Nairobi, Kenya

Looking to buy a house in Kenya? Homeownership is probably the biggest decision of your life. There are many consideration factors involved and the most important being the method of payment. You can opt to pay for the house outright if you have the funds. But in most situations, homes are bought via a mortgage.

Understanding mortgages

The way mortgage works are very simple. You select a house of your choice. A financial institution buys the home on your behalf. And you pay the price of the house to the institution in regular installments. In exchange for allowing you to start living in the house without you having paid the full price for it, the institution charges you interest on the price of the house.

Types of mortgages

There are two kinds of mortgages. Fixed-rate mortgages have a fixed interest rate from the first day to the last but are usually more expensive to acquire. A cheaper but slightly riskier alternative is an adjustable-rate mortgage, where the interest rate depends on market conditions and changes from time to time.

Other charges

Apart from the interest rate, there are some other charges associated with mortgages. To name a few, there is usually a negotiation fee, a monthly ledge fee, legal fees, valuation fees, commitment fees, and a stamp duty.

Do you qualify?

The process of getting a mortgage in Nairobi is simple. The first step is to find out if you qualify for a mortgage. Factors like your income, personal expenses, the type of property you want, your age, your credit score determine if you do.

What property do you desire?

Once that is out of the way, the next step is to select a property of your choice. Once a property is selected, you will be assigned an agent who will help you get in touch with the right financial institution.

Time to make a deal

Your application is then processed based on certain documents you submit. After this, the financial institution can make an offer to you. The property is then formally acquired by the institution that you will be availing the mortgage from. Once the property is officially in their name, they can assign a monthly, quarterly, or yearly charge to you, which acts as an installment.

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