1. Credit Score: Credit score is a number which calculated by various Credit Rating Agencies. Try to Improve your credit score by not defaulting any credit card payment or any EMI payment. If you delay the credit card payment, it impacts your credit card. Do not apply loan again & again. It affects your Credit Score. For Taking any Loan, Credit Score matters. CIBIL’s Credit score is considered. If your Credit Score is above 750 then it will help in taking Home Loan Easily.
2. Income Proof: Past Regular Income will be checking while taking home loan. Income proof can be your Last 3 months Salary Slips, 6 Month Bank Statements for checking Regular credit of income as supported by salary slip or ITR. Salary Slips & Salary ITR for Salaried People. Business ITR for Businessman. In case of ITR, 3 years ITR is required & loan will be given based on the average income of past 3 years as mentioned in the ITR.
3. Processing fees & Other Charges: You have to pay 10,000- 30,000/- for Processing Fees while applying for Home loan. There are other charges as well. So, don’t apply home at multiple places. You have to do enquiry of the above things before applying for Home Loan.
4. Stamp Duty & Registration Charges: While making Down Payment, keep in mind of Stamp Duty & Registration Charges. You have to pay 6-7% of Sale Agreement amount as Stamp Duty (6%) & Registration charges (1%). These Rates are as per Maharashtra State.
5. Floating Rate of Interest: Always Choose Floating Rate of Interest for Home Loan as this will give benefit of lower home loan rates. Also check weather the bank auto reduces the Home loan rate or you have to fill the details in a form & submit to the bank along with some fees for reducing the home loan.
6. Loan Duration: You EMI will be based on Loan Amount, Loan Rate & Loan Duration. If the Loan Amount is higher then Loan Duration is also higher if you keep the EMI low. But if your loan amount is low then keep the EMI high (if you can) so that your loan duration will be less. Try to Keep Loan Duration as low as possible.
7. Tax Benefit: For Home Loan, you will get take benefit of Stamp Duty paid up to 1.5 lakhs u/s 80C of Income Tax Act. For Principle Repayment, you will get benefit up to 1.5 lakhs u/s 80C of Income Tax Act. For Interest Repayment, you will get benefit up to 2 lakhs u/s 24 of income Tax Act.
8. Joint Home Loan: While Applying Home Loan, Apply for Joint Home Loan as it will give benefit of Lower Rate of Interest if one of the persons is female. You both get benefit Tax for Principle as well as Interest Repayment in the Income Tax Act.
9. Additional Interest Benefit u/s 80EEA: If you have taken loan between FY 2019-20 to FY 2020-21, the Stamp Duty is below 45 lakh & it is your 1st house then you will get Additionally Interest repayment benefit of 1.5 lakh in Income Tax Act.
10. TDS on Sale of Property: 1% TDS to be deducted by the buyer of the property if the Sale Agreement amount is above 50 Lakhs. Buyer & seller should agree that this TDS amount is a part of Sale Consideration. This is because the seller may incur capital gain income while selling the house. Seller can get this TDS amount as refund if his total income is not taxable.
11. Pre-Pay the Loan: Try to Pre-pay the loan as & when you have liquid funds so that you can save the additional Interest payment on home loan & can finish your loan earlier.
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Good to know new things.