A Home Loan Guide for Novices

For someone who is looking to buy a property, home loans is an intelligent option in India. It gives you ownership of the house in easy installments plus it gives you certain tax benefits. Owning a house is a major decision both financially and emotionally. Purchase of real estate after all is an investment, giving you good returns in the long run. For this you must choose the right type of home loan with the best offers and interest rates. There are certain facts about the Income Tax Act in India you should be aware of as well.

Home loans can cover the following – purchase of land, renovation, extension and construction. The following are different types of loans banks in India offer:

1. Home Purchase Loan: This is the commonly sought loan. It is used when you buy a new apartment or house.
2. Home extension loan: This loan can be taken up when you need to extend your current apartment or house further like for example, an extra bathroom, another room etc.
3. Home construction loan: This is taken up when you want funds to construct a new home on an existing property. This loan can sometimes be confused with home purchase loan but you should know that the terms and conditions of this loan are very different from purchase loans.
4. Home conversion loans: This loan is used when you want to want to move to a new home and need the extra funds for it. This eliminates the need of prepayment of the previous loan.
5. Bridge loans: This is for that time when you are selling the old house and buying a new house. The loan amount helps you to buy the new house while you are waiting to sell the old home.
6. Home Improvement loans: This loan is opted for when you are looking to get some renovations done in your house. Repair works are also included in this loan.

The tax benefits of loans in India:

It requires a huge sum of money to buy a new home. To make the financial burden lighter on the common man, the Government gives some tax benefits on home loans. Here are a few things you should know about them:

1. Purchase loans and construction loans can attract tax benefits. The interest as well as principal components get these benefits.
2. Repair of property is also eligible for interest deduction.
3. Any home or construction loan taken on or after April 1st, 1999 is eligible for deduction of up to Rs.1.5 lakhs. Before that date, Rs. 30,000 is deducted.
4. The deductible can take place only once the house has been constructed or bought. It can take place as five installments. It takes place over five years. The first one is deductible in the first year the construction is finished.

Home loans – The situation in India

There are more than a few banks offering home loans in this country. Depending on the EMIs you can make your choice. There is quite a competition between lenders. You can apply online as well as offline for the home loan.

Even though there are many lenders, you must make your choice for home loans lender wisely as it is a huge financial investment and decision.

Dream Home Improvement Budgets – The Money Saving Value of a Home-Building Coach – For Owner Builder

Who is responsible for keeping your project on budget? It probably goes without saying but if you’re considering a home improvement project or remodel, you’re keenly interested in the cost.
The cost of any major (or even minor) home remodeling project is one of the biggest factors in the decision to proceed with it or postpone it. Then, right on the heels of that is the desire to keep your project moving forward on time and on budget. As an owner builder, I recommend two things: 

1) An Owner Builder should understand the “on time and on budget” claim
2) Owner Builders should seek the help of a Home Building Coach 

First; it’s almost a given that 99% of projects are not completed on time and on budget. That’s just not the way building goes. And the few times that they are? It’s quite likely that the mark-up in the bids were such that the profit to the builder was excessive.
Second; the advise to use a Home Building Coach is designed to give the owner builder much needed guidance to understand bids, pick the best ones, and manage the process when changes and exceptions come along. Because they will!
As a coach, your building professional works alongside you to manage the entire process of planning and execution. The goal is really three-fold: 

  • Make your project more enjoyable
  • Get more of what you want in your home
  • Save you money along the way

 All three of these goals overlap and result from proper expectations and proper management. An experienced industry professional (your coach) adds immeasurably to your journey. If you have unrealistic expectations, your experience will suffer. If you have no management system, you won’t succeed.
How Your Coach Saves You Money
You’re likely an owner builder for one main reason … to save money. Yet, alone, you risk making mistakes that cost you money and you risk falling out of budget which can have serious repercussions on your success. Here’s how your coach saves you money: 

  • The coach’s fees are usually a small fraction of the cost of a General Contractor
  • Your coach will bring you a complete management system to keep on track
  • The coach will help you pick the right subcontractors
  • The coach will guide you to keeping the process moving forward
  • Your coach will analyze the cost of potential changes

 All this combined, you’ll be better equipped to assess the cost of your project as well as execute it in a way that keeps you as close to on budget as possible. Most coach’s are paid using a pre-set fee so their motivation is too keep your costs down, not inflated. This is an important difference from most General Contractors.
Home building and remodeling projects can be complicated but there is exceptional and experienced help out there. Seek it out.