FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
Cheer for first time home loan borrowers!
Home loan EMIs definitely have a place in most of our monthly budgets. The growing property prices and the inflation hardly leaves sufficient amount after the payment of the housing loan EMIs for most of us today. However having a house is one of the basic necessities and it cannot be taken for granted.
Prior to the announcement of the budget, loan borrowers were expecting the finance minister to revise the tax deduction towards the interest paid for their home loans. According to previous reports the expected increase in the existing amount was from Rs 1, 50,000 to Rs 2, 50,000.
Today, the finance minister has announced an additional reduction of Rs. 1 lakh on EMIs for one’s first home loans up to Rs. 25, 00,000 for the period 2013 – 14. This is expected to be encouraging for the new first time borrowers and is likely to make the existing first time borrowers also happy.
This is expected to support affordable housing to many and it is also expected to increase employment opportunities to people in construction sector.
In addition to this, the finance minister has also announced that the additional tax deduction can be carried forward to the next year by the first home loan borrowers, in case the limit is not exhausted in the current year
The budget has also indicated an Urban Housing Fund to be set up – this could help many new buyers to get loans at better rates. The already existing Rural Housing Fund will also be given greater support thus helping the housing industry broadly.