27-Mar-2021 |Home Construction Loan,Home Construction
The satisfaction and comfort that one derives in living in one’s own house as compared to staying in rented accommodation are immense. In fact, there are instances of people, who, tired of shelling out monthly rents, apply for home construction loan to build their own houses. Some maintain that staying in a rented accommodation costs less, while some say that having one’s own house is the best way forward as one can live with freedom and without having to worry about paying monthly rent.
Rent keeps on increasing and the rented house always has a threat of vacating.
Owning a home is the dream of every person, the only fly in the ointment being the fact that the sky-rocketing property prices in the recent past have made people take the easy way out of staying in rented accommodation, rather than buying a house. However, if you have decided to stay put in the city of your choice and want to have a dream house of your own, apply for house construction loan. At the same time, make sure you have the necessary funds for the down payment and stable future cash flows.
There is no denying the fact that having your own home gives you that rare sense of security and happiness which staying in a rented accommodation can’t. Buying a house with a loan makes things easier as you mentally prepare yourself to pay the EMI over the long term. After your EMI is over, you can breathe easy knowing that you don’t have to pay any further money on your housing loan.
Experts are of the opinion that the best period of buying a house is at a young age; maybe, just after settling down in a secure job, or sort of settled in a business-owned or parental business because one doesn’t have to worry about the financial part. Managing the EMIs initially may be difficult, but after, say, five to ten years, when income goes up, it would be fairly easy to pay monthly EMIs. Moreover, there is a corresponding rise in property prices with each passing year.
Those who happen to occupy a rented accommodation, count their blessings once the landlord extends the tenure of their stay through a legal agreement. But not all are lucky in this respect. It all depends on the whims and wishes of the landlords. Moreover, the rising rental prices cause anxiety among those who are not in a position to buy their own homes. However, there is good news for those in a mood to buy their new homes thanks to the availability of lower interest rates and the government subsidy for first-time buyers of affordable homes.
Owning a house gives you the additional advantage of getting extra income through rentals or from paying guests. Those who happen to pay monthly rents in rented accommodation may find the expenses cheaper in the short run as compared to the EMI, but in the long run, you actually end up paying more. Needless to mention, there is no way you can recover the cost of your rent. As a homeowner, you can easily mortgage the property but a tenant cannot mortgage a rental property.
Buying a house is a smart idea for many as there are tax benefits on the principal amount, the interest one pays, in addition to some more benefits that can accrue to you if you are a first-time buyer. There is no doubt that home construction loans are a unique way to reduce tax and own the house of your choice.
One more advantage of owning a home is that it frees you from the annoying ritual of monthly rent payment because your mortgage payment each month turns out to be your investment for your own secure future. You can pay as much or as little as you like by going for a payment schedule that suits you from many mortgage options. Needless to say, a day will come when your house might be worth more than you paid for it. So, always work toward having your own house which is a golden goose for your future.
For construction cases, in fact area of construction can also be restricted to suit our cash flows and as the cash flows increase over a period, he can extend the house.
20-Feb-2021 |Home Construction,Home Construction Loan
Constructing one’s own beautiful home on a piece of land is every man’s dream. And if you happen to be one of those lucky few with a piece of land at your disposal, then it’s time that you thought seriously about constructing your own home.
Frankly speaking, constructing a house is no walk in the park. You need to have the necessary financial wherewithal to meet the escalating costs of the project. In other words, constructing a house involves a lot of money. In this situation, you can make arrangements for necessary funds by applying for a Home Construction Loan. You can either employ a contractor for the job or handle the entire thing all by yourself. The choice is yours. You also need to keep in mind that the process of approval and disbursal of the home construction loan is different from the regular Home Loan. Before you choose the lender, you should do thorough research of the different financial institutions and review their interest rate, documentation requirements and loan terms.
Four Must-Known Facts About Home Construction Loan
HOW MUCH ARE YOU ELIGIBLE FOR
A construction loan, which is also known as a “self-build loan", is considered a short-term loan that is sanctioned by a bank to finance the building of a home or another real estate project. As for the loan amount that you are eligible for, it depends on your income and repayment eligibility. You can be eligible for construction loans up to 80 - 85% of the value of the property.
A REAL MONEY SAVER
Borrowing a home construction loan would definitely help you save more money in the bargain. Ideally, you should settle for an owner-builder construction loan; it would save money on the labour. On the other hand, if you hire a builder to do it for you, the construction cost in all probability would shoot up.
Loan Disbursal Process
When you apply for a home construction loan, the amount will be disbursed in instalments only. This is, however, not the case with home purchase loans, where the lender pays you the full amount in lump sum. However, in the case of home construction loans, one should tread carefully. The approved loan will be disbursed in phases, depending on how much progress the construction has made. Most banks in India, as a rule, pay the approved loan amount in about 3-5 instalments. This obviously implies that you must have sufficient funds at your disposal to purchase the raw material and get started.
The bank which has sanctioned your Land purchase and construction loan must be convinced that the work is making smooth progress. It is only then that the bank concerned would disburse the loan.
Using Construction loan for interior work:
Home loan for self-construction is generally sanctioned for the immovable construction works. And it is always ideal to check with the concerned institution, whether the sanctioned construction loan can be used for interior work or not?