Ask Mint | Don’t make home loans a noose

Ask Mint | Don’t make home loans a noose

—Aman Chaudhary

As a government employee, you could get a home loan on a second mortgage from lending institutions. However, a second mortgage is possible provided you have the requisite approval from your organization/department with whom the property is already mortgaged. Once that is done, the process is similar to a normal housing loan. The amount of home loan that would be approved will depend purely on your repayment capacity.

I plan to buy a home and have selected one which will cost me Rs24 lakh. I have some savings and if I wait for two years, I can manage that amount from my savings. But my wife suggests that either the real estate prices will shoot up by then or that particular property will be sold, and we should go for a home loan now. Is it advisable to do so? I’ll be taking a Rs14 lakh loan.

—Sujoy Ganguly

Nothing matches the comfort of living in one’s own house. Therefore, if you are planning to buy a property for your own use and have already liked one as per your requirement, we would say that this is as good a time as any to buy property. Also, housing loans have great tax benefits which bring down the effective interest rate to around 5% per annum. For a self-occupied property, the customer can claim tax benefits of up to Rs1 lakh per annum on the principal amount under section 80C of the Income-tax Act, 1961, and up to Rs1.5 lakh per annum on the interest paid under section 24.

However, please note that to experience a hassle-free home loan process, it is imperative for you to select a suitable housing finance company with the requisite expertise and in-depth knowledge of the industry.

Will the same institution or any other give me a home loan if I have another home loan running and due to be completed in 2020?

—Ipsita Mohapatra

Loan eligibility is essentially determined on the basis of the repayment capacity of the borrower, which takes into account several factors such as income, age, qualifications, work experience, number of dependants, job profile, spouse’s income, savings history, existing liabilities etc.

Therefore, you can take any number of home loans provided you have the capacity to repay them. It is important for you to ensure that the housing loan does not become a burden for you.

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