Reasons for taking a Home Loan
In today’s time, the market of real estate has been so competitive and property prices are rising with every passing day. In such situations, purchasing a house or a property with hard cash is an ideal option, but not everybody can afford this. In present time, continuous appreciation in the value of the property makes a compelling case for buying a house with home loans. Home loans in India were introduced as a suitable financial solution that helps you to buy your dream house and allows you to pay in installments up to certain period of time.
The individuals are actually leveraging the amount that they have with themselves by taking a loan and financing a larger cost house. As these are secured loans, an individual can afford this with ease and quick processing. With home loans, there are several benefits that you can enjoy:
- You can own a house early on in life
- You are insulated from increase in property prices
- You can avail of tax benefits
Not only this, there are other important factors that should be considered and these factors explain the reasons for a home loan. Rents paid in a year are equal to the 4% to 6% of the property value. So, if a house worth Rs. 25 lakhs then, will most probably be rented on the cost of Rs 8,500 to Rs 12,500. Rents also increase on an average of 5% every year, and this may vary as well from city to city. And, property prices usually rise by 5% to 10% every year and this make real estate segment quite uncertain and expensive. If we talk about the interest rate on a home loan, then, it ranges between 8% to 13% in recent years. And, on top of all, tax benefits can be availed by both taking a home loan and renting a house.
