Purchasing a home may be a requirement for many individuals but today, it also stands as a means of investment for the future. But when it comes to the decision to purchase a property, various factors are required to be taken into consideration. For one, the price of the property is the leading factor for purchase. But the value of this price in turn will change, depending on factors such as future infrastructural growth and value of the land amongst many others.
Yet the decision yet remains whether you should purchase a home now or wait in the future. But there are several factors that will favor you, if you only purchase your home today. If you only purchase your home within a budget, here is how it can benefit you.
One advantage of a purchase of a property is that the value only appreciates, and rarely ever depreciates. Plenty of banks and institutes have accepted this factor, and taken this into consideration when applying for loan to finance the purchase of a home. Therefore, this makes it easier for one to calculate the ideal loans rates in terms of interest, tenure and even EMIs. You can even use the loan EMI calculator to work out the loans rates that will benefit you in the long run keeping in mind the budget you have at the moment. This in turn will help you plan your finances, in order to save up sufficient funds to sell out the property after a given time, and purchase a larger property from the proceeds of this purchase.
Although financing a home purchase with a loan will affect your finances, you can get plenty of tax benefits out of it. For one, if you sell the purchased home after a period of three years, there is no requirement to pay any capital gains, if the funds are reinvested in a property. This tax benefit, in addition the savings in rent and appreciation in the property value will ensure that you can purchase a home on a budget, and improve it for a higher value.
Additionally, you can also get an income tax deduction on the home purchase. Under Section 80C, you can get at most a 1.5 lakh deduction on a home loan principal amount. For a couple, it would mean Rs. 3 lakh. Under Section 24, you can get a deduction of Rs. 2 lakh on the interest that is paid every year, if the purchased house is self – occupied. For a couple the amount will be doubled. Alternatively, if the house is given on rent, the entire amount can be claimed for deduction. With these factors, in the tenure of the loan, you will get financial returns that will benefit you
Future selling price
As mentioned previously, the value of property appreciates in the future. This will work as an advantage for you in the future, especially if you the value of the property appreciates. Additionally, you can also alter the property to increase its value, which can be overall sold a price that is higher than its original purchase price. You can use the loan EMI calculator, to assist you in this step.