Is Home Loan Beneficial? Here’s Why It’s a Big Yes
Thinking about owning a new home? Maybe getting a home loan can be beneficial for you. A home loan is a fool-proof way to get the house of your dreams, fast and easy, even if you still don’t have enough money. Here are the reasons why home loan beneficial and why you should get one.
Buying a home is no simple task. And it’s the best feeling in the world when you able to get one. Acquiring a home is one of the biggest financial investments you can make in your lifetime; and that’s not just because of the sentimental value. Through buying a loan you are making your investment portfolio look stellar. And also, the look on your proud parent’s face when they see their child finally owning a property that he has poured every sweat in, is just amazing and incredible.
Low interest rate
Home loan means having lower interest rate. The best way to manage interest is by actively managing your home loans! And it’s not that difficult as it sounds. Banks and home-loan lenders often give new borrowers much better rates than other borrowers. During the season when interest rates go up, if your cost of borrowing increases by more than 2 percentage points, pay 0.5 per cent of the loan outstanding as processing fee (conversion charge) to your lender to avail the rates offered to the new borrowers. Having home loans means you are getting better deals.
All about capital
One of the best reasons why people buy homes, instead of opting for rent, is because the continuous increase in capital appreciation. Construction costs alone, which account for more than 70 per cent of the house’s cost, have risen at 15 per cent annually in the past decade. Rents too seem to keep up with inflation. Opting for buying a home and getting a loan can help you get protected from inflation in the long run, making you feel safe and sound to your own home in no time.
Every country in the world offers different types of tax exemption to those who has a home loan. It’s because it’s every citizen’s right to own a house in any way possible. Isn’t that amazing?
Makes home ownership affordable
Home loans make home ownership accessible to everyone. You can choose for any type of payment terms that you want, as long as it fits your budget. For example, traditionally, when people take out their first mortgage, they’ve tended to opt for a 25 year term. This can help bring your monthly payments down, but on the bad side you’ll have to pay for your loan for longer
It’s worth going for the shortest term you can afford – not only will you be mortgage-free sooner but you’ll also save yourself thousands of pounds in interest. And don’t forget, when you remortgage and switch to a new product, you shouldn’t opt for another 25 or 30 year or another decade term.