Many of us feel acquiring a home loan for the purchase of a second home can be done at the snap of your fingers. Well, think again! There are many things which one has to know when trying to obtain a second home loan to make certain it is simple and advantageous. In this post I shall take a closer look at your questions regarding preparation for a second home loan.
Am I entitled? How much amount can I avail?
It is imperative to comprehend that the terms and conditions for the second home loan may not be similar as the first. There might be high costs to incur forthright, and the conditions can be very strict as the banks have to be sure of your capacity to repay since you already are paying one home loan.
Furthermore, although banks fund almost 75% of the house value, if the loan amount is over 75 Lacs, they can lessen this percentage for the second home loan. In second home setting, banks draw out that it is for ‘investment’ purpose. There might be a chance of increased interest rate for the second home loan but it is vital to know your entitlement before applying; it may also be prudent to consult a home loan expert services.
Usually, the home loan amounts will rely on your monthly income and your down payment besides appraisal of your other investments. If you are already paying an EMI for your first loan or have any other loans, then the home loan amount provided by banks can become lesser. Your age can be a factor too. The term you decided for your earlier loan can be lowered, which can cause increase in EMI and successfully diminish the loan amount.
One might want to go for joint loan for incremental loan, but the older individual’s age will be taken into account for the loan, which might not be known to the borrowers. This is where expert help about what to anticipate from your home loan with regards to amount, tenure etc. and the apt product for you.
Are there tax benefits
A second home loan can cut your general tax burden. A home loan availed on your first self-occupied house is entitled under section 80C to deduction for Rs. 1 lakh of the principal amount and under section 24 Rs. 2.5 Lakhs of the interest paid.
For a second home loan, only the payable interest is entitled to a deduction. However, there isn’t any limit on the deduction on interest paid out for second home loan if it is on rent. A second home loan can certainly aid in saving on your general tax load, and to warrant you get the best out of your second property; one can take consultation from a home loan expert.
Purchasing a second home with the help of a competent home loan expert can be extremely useful for you. So if you are looking to avail a home loan in Delhi then you are ready now.