How More Women Can Fulfil The Aspirations Of Owning Their Homes

Buying a house is one of the most important milestones that every individual wants to achieve. Yet, it is also a very crucial and financially tricky decision to make.

A convenient source to fulfil our dream of owning a house can be through a home loan. A home loan is an effective borrowing tool, when used meticulously it has  benefited countless people.

Although availing a home loan generates regular financial outflow through EMIs, it has its own benefits. It improves the credit score when the EMIs are timely paid over the years. It reduces the tax liability by efficiently using the tax deductions available to us along with reduced stamp duty charges in some cases.

Joint Loan

It is always advisable that home loan should be taken jointly, so that both the borrowers can enjoy tax benefit on his/her taxable income individually. It is further preferable to have at least one woman borrower enabling us to take the advantage of additional benefits.

High repayment tenure and lower interest rate

Among all types of loan, home loan has the longest repayment tenure which can go up to 30 years depending on the loan eligibility and other norms of the home loan provider. This means that longer the loan tenure, lower is the EMI amount, thus providing people the comfort of repayment over a long period without putting pressure on our finances.

Thus, one can reduce the burden of equated monthly instalments by extending the tenure. Further, in some cases of women applicants, the home loan interest rates could be 0.5-1% lower than the prevailing market rate. This may look like a small difference but when compounded over the long tenure of a home loan it can make a significant difference.

Capital Appreciation

The prices of property increases over time, having a house adds up to our list of appreciable assets.

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Tax benefits

There are two components in a Home Loan repayment: the principal amount and the interest paid on the loan amount. We can avail the tax benefits on both these components under Section 80C, and 24(b) of the Income Tax Act, 1961. Further deduction under section 80 EE and section 80 EEA is allowed based on the date of purchase of the property.

Reduction in stamp duty

Stamp duty is the tax the government places on a legal document for transfer of assets or property. A significant advantage offered by the government is reduced stamp duty rates in case of women property purchasers. The rates vary from state to state, for example in Jharkhand the stamp duty rate for women applicants is only ₹ 1 which is otherwise 7%, and in Delhi it’s 4% for women applicants while for others it’s 6%. So, the difference varies from 0.5% to 3% and thus when considering  a property worth a crore the difference is appreciable.

Opportunity to grow our funds

Even if we are capable of buying a home using our personal funds, it is still advisable to avail a home loan facility to save on the taxes. Such saved funds can be invested in other available avenues to earn an attractive return for example mutual funds. Thus, we can benefit doubly, first by earning a higher return on our own fund and second by paying a lower effective interest rate on our home loan.

It’s never too late, take the first step today and become a homeowner.

Image Source: By Pavel Danilyuk via Pexel

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