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How to Save Money on a Home Loan

Buying a property is one often of the most terrifying and biggest steps we take in our lives. However, investing in property is a sign of financial maturity and stability. Most of us, are so concerned about the monthly instalment that we barely give our home loan a second thought. However, there are a number of important steps that a homeowner can take to ensure that they save money on their home loan.

Research the Market

Shopping around for a home loan will give you a great market insight and help you select the best suited financing option . Comparing loans and negotiating with banks can save you a lot of money. Once you know what each bank has to offer in terms of rates and fees, you can negotiate for the best deal. The lower your interest rate, the less money you’ll have to pay back over time, saving you some money in the process.

Improve Your Credit Score

A credit score is a 3-digit number that shows numeric summery of your credit health. This score is derived by credit bureaus such as CIBIL, Equifax and Experian by analysing your credit history. When applying for a home loan, after an applicant fills out the application form and hands it over to the lender, the credit score and credit report of the applicant is immediately checked. If the credit score is low, the lender may not even consider the application further and reject it. However if the applicant has a good credit score, he is considered credit-worthy and this betters the chances of the loan being approved. A high credit score also can make the loan available at a cheaper interest rate and thus save money for the borrower.

Opt for Refinancing the Loan for a Lesser Interest Rate

Very often the RBI often lowers the repo rate, resulting in in lowered home loan rates for borrowers. However, very often this new rate is applicable for new borrowers and not for the existing borrowers. In this scenario, the existing borrower can opt to refinancing his home loan. This essentially means switching to lender in order to take advantage of the new and lower rate. However, one must be aware of the costs associated with refinancing before opting for it

Be Aware of Tax Benefits and Deductions

To boost the realty sector the Indian government often offers tax benefits to home loan borrowers. One must be aware of the deductions that you’re entitled to if you want to save as much money as you can on the interest. For instance, under section 80C, a home loan borrower can claim deduction of up to Rs 1.5 lakh. For a self-occupied property, a Rs 2 lakh benefit is available under Section 24 (b) of the Income Tax Act for interest on the home loan.

Taking a home loan is a major financial consideration, and it is important for the borrower to do a complete due diligence for opting for a home loan.

As one of the premium property developers in Bangalore, Ozone Group has a proven track record of innovation and customer satisfaction. From residential condos and serviced apartments to integrated townships, hotels, resorts and business parks, we have been successfully combining design and technology in all our real estate projects. To invest in an Ozone home, visit http://www.ozonegroup.com/ to know more about our various ongoing residential projects in Bangalore and Chennai

 
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