When you decide to buy a home, then it is a major decision on your part, and when you have a home of your own, you feel secure. However, it is not an easy task for the middle-class families to buy a house.
The middle-class families can only go for a house if they borrow money. Most of these families feel that a home loan can turn out to be a liability. The problem with the home loan is that the repayment period may prolong to 25 to 30 years.
This is why you have to consider many aspects when you decide to borrow money for such a long time. The truth is that a home loan has got both its set of advantages and disadvantages. We will look at all the aspects.
Benefits of A Home Loan
Low-interest rate
What makes the home loans the appealing idea is that the rate of interest is lower on these loans in comparison to a mortgage loan, personal loan and vehicle loan. This is why you will not feel overburdened when you have to make the monthly payments.
Tax Rebates
When you pay interest on the money borrowed to buy a home, then you get tax rebates on this interest. If you are one of those individuals who fall under a high tax bracket, then borrowing money to buy a house can save you from the taxes.
Capital appreciation
When you borrow money to buy a home, then you can benefit from the capital appreciation. If you look at the facts, you will realize that the capital appreciation on the property is high in comparison to the interest that you pay on loan.
Let us understand this aspect with a practical example. You borrow an amount of $100000 at an interest rate of about 10%. The tenure to return the borrowed money is about ten years. Due to the capital appreciation, this 10% interest rate will not turn out to be a bad deal. The capital appreciation will be able to take care of the interest expenses also.
Some of The Drawbacks of a Home Loan
You will have to get hold of a guarantor for a housing loan. Finding the right person may take you some time and effort.
After going through the mentioned benefits, you should be convinced that housing loan is a good idea. The number of pros supersedes the cons. This is why when you plan to borrow money to buy your home, then it is essential that you do a bit of investigation on your part.
You should also evaluate your financial scenario because you are the best person to decide whether you will be able to repay the borrowed money in time or not. If you are having problems getting money to buy a home, then many companies can help you in this regard.
For example, you can opt for iSelect. This way you can get a housing loan fast.
About Jammie Morey
Speak Your Mind