Buying your dream property is one of the biggest steps in your
life. It’s like a sign of financial maturity and offering stability for the
near future. Taking a property means chasing the preferred location & its
vicinity, budget, builder authorization and finally how to finance it. Well,
with private finance companies willing to offer a home loan,
financing your dream is no more a herculean task.
However, when one takes the home loan there is a lot of aspects
which needs careful consideration such as interest rate, processing fee,
principal amount, etc. Most of us are so concerned about the monthly
installment that we barely give our home
loan a second thought. There are a number of important steps that can be
taken to ensure that the money can be saved on your housing finance. So, here
are a few tips that will help you save money on your housing loan:
Do thorough
Research
Shopping around for home loans need proper market insights and
help you choose the best-suited financing option. Comparing loan and
negotiating with lenders can save you a lot of money. Once you know what
lenders have to offer in terms of rates and fees, you can negotiate for better
housing loan deal. Lower the interest rate, lesser you would be paying and more
savings on your total cost you will bear.
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Improve
Credit Score
Your Credit score has a direct impact on the interest rates.
Hence, it’s always important to keep improving your credit score. So, that you
can negotiate with the lenders for better rate deal. When applying for home loan, ensure that you improve your
credit score at least six months to one year before the application. If the
credit score is low, the lender will reject your application. And if the
applicant has a good credit, score he or she is considered credit-worthy and
lenders place a trust on him or her.
Opt for
Refinancing
Many time lenders lure with an interesting deal, which later
proves to be costly on your wallet. If it's proving costly you can talk to
other private lenders who are willing to reduce the interest rate for you. A
good credit score, better income source, and timely repayments can put in a
comfortable position for negotiating with the existing lender or switch lenders
and opt for home loan refinancing.
One must be aware of the costs associated with the balance transfer option.
Tax Benefits
One of the best ways to save money is redeemed tax benefits.
You're entitled to tax benefits and it can help you save money as you can on
the interest. For instance, under section 80C, a housing loan borrower can
claim for a tax deduction of up to Rs 1.5 lakh if he or she is a salaried
individual, and for self-employed, they can available up to Rs 2 lakh under
section 24 (b) of the Income Tax Act, 1961. Taking a home loan is a major financial decision of life and it’s important
for the borrower to check wherever possible to save money and then make an
application.
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