ASK OUR PLANNERimmediately, you have no other
choice but to resort to a Home
Loan. You also need to keep in
mind the one-time stamp duty,
registration & society related
charges. However, if you have
enough funds to meet the
entire purchase price, whether
or not to opt for a Home Loan
can be confusing.
Even if you have additional
funds, you can go for a home
loan to enjoy certain benefits.
The principal part (under sec
8 0C – Rs. 1.50 lakh p.a.) and
interest part (under sec 24B –
Rs. 2 lakh p.a., subject to certain
conditions) of the EMI is
available as a deduction from
your taxable income. The one-
time stamp duty/registration
charges paid can also be
claimed under sec 80C in the
same year. Timely servicing of
EMIs will also help you improve
your credit score over a period
of time, making you eligible for
best loan offers from lenders.
As you make on timely EMI
payments, your home equity
(property price less outstanding
loan) keeps rising over time:
you can take a Home Equity
loan or a Top Up loan on this
equity in the future, for any
financial requirements.At the same time, opting to
choose for a Home Loan, even
after having sufficient funds for
full payment, comes at a cost.
You have to pay the interest
(currently ~9% p.a.) on the
entire outstanding balance
each month. And, you can
invest the entire amount
available. If you use the entire
amount for buying the property,
then you can invest the monthly
surplus available, instead of
routing it for EMIs.Assuming you pay Rs.9 lakh as
down payment and comparing
two scenarios for Rs.36 lakh (i.e.
4 5 lakh less 9 lakh) – one if you
take home loan for Rs.36 lakh
(at 9% p.a.) and invest the
amount of Rs.36 lakh you have
in hand and two, if you use
Rs.36 lakh also for buying the
property and invest the
monthly surplus available for
next 20 years. If you would be
able to generate a post-tax
return of 7.5% or more from
your investments, then going
for a home loan and investing