If there’s one thing that makes people hesitant about investing in a home, it’s the common real estate myth that buying a house is a very expensive affair. While real estate does require more funds than many other forms of investment, it can actually bring you greater returns in the long run. If you are thinking of buying your first home, don’t let the financial aspects of it deter you. There are many simple techniques which can help you save a lot of money at various stages of the home buying process. Here are the best ways to save money in your house so you can buy a home and save money at the same time.
- Start Saving as Much as You Can
The first step to saving money on your property investment is to start saving money in your account. Even though most people opt for a home loan to help them finance their dream of buying a house, most loans only cover 80 percent of the total property value. This means that you need to have at least 20 percent of the funds required in your savings. But saving a higher amount than the required 20 percent can actually help you save even more money. It will cut down the loan repayment period and the amount you need to pay as EMI every month. So, if you want to reduce the cost of buying a home, wait until you have a significant proportion of the funds saved up.
- Increase Your CIBIL Score
The most crucial factor which can determine whether or not your request for a loan gets approved is your CIBIL score. A CIBIL score, also known as a credit score, tells a bank how reliable a candidate you are for a home loan. Your credit report is a complete history of all past loans and credit card repayments that you have undertaken. If you have always repaid your loans and your credit card bills on time, then you are likely to have a good CIBIL score fo a personal loan. Apart from getting your loan request approved easily, a high CIBIL score for loan approval can also help you get discounts on your EMIs and save you a lot of money. If you don’t have a good CIBIL score for home loan, first clear all outstanding loan debts and bill repayments before you apply for a loan.
- Compare Various Home Loan Plans
Each financial institution has specific home loan policies which differ in the amount payable in EMIs and the tenure of the home loan. One of the best home loan tips you should utilise is to explore other banks as well to check if they have better offers. If you have held an account with your bank for a long time and have a good history with it, it might be cheaper to apply for a loan with them. Banks who already have a long relationship with you are much more likely to give you a good deal on your home loan. They can reduce your EMI amount significantly and shorten your loan repayment period as well.
- Take Advantage of Tax Deductions
Owning a home makes you eligible for many income tax deductions which can help you save a lot of money. Understanding which of the tax benefits you are eligible for can go a long way in reducing the amount paid annually as tax. Homeowners can claim a deduction of up to Rs. 2 lakhs if they are residing in the property or if it is vacant. If the house is given for rent, you can claim the entire interest amount of your home loan as a deduction on your income tax.
- Register Your Home Under a Woman’s Name
In an effort to encourage more women to invest in property, women are granted special benefits at various stages in the home buying process. This is why it makes financial sense to register the property in your wife or mother’s name. Most banks offer heavily discounted interest rates for women when they apply for home loans. Women with a separate source of income can also claim an additional tax deduction of up to Rs. 1.5 lakhs on the interest payable for their home loan. Certain states in India also offer a lower stamp duty for women as compared to men when it comes to registering property. The PMAY initiative proposed by the government also offers special incentives and preference to women
With these tips, investing in real estate can help you manage your finances wisely. If you are planning on investing in a home soon, make sure you visit Lancor for beautiful homes in the heart of the city. Our homes are also available at very competitive prices, so you can be sure that you’re getting the best deal!