We no longer live in an age where people save money all their life and build a home when they are well past their youth. Millennials are already investing heavily in real estate, armed with convenient home loans and highly affordable home loan interest rates. Young couples nowadays can afford to dream of a home of their own. It doesn’t take much time to turn this dream into a reality.
Arranging proper finances
Married couples planning to buy their dream home need to assess their home loan eligibility and apply for the home loan. Of course, a home loan is not the only way of buying a home. Couples earning well can save aggressively for a few years and pay a lump sum against the home purchase. Those with sufficient inheritance, too, can invest in a piece of real estate. Couples who have investments lying in low-yield products can convert the same to cash and buy a home. To sum up, there are several ways a married couple can buy their dream home. Home loan, however, does happen to be the most convenient and one of the most tax-friendly ways of buying a house.
Capitalize on the benefits
A married couple can join hands not just in matrimony but also in getting a better housing deal. Here are a few benefits that a couple should plan for while financing their home.
Better home loan interest rates – Having a co-applicant reduces the home loan interest rates in the case of most lenders. A home loan is a long-term loan, so even a 0.5% discount on the interest rate can save substantial interest costs.
Repay more and faster – A working couple has higher combined loan eligibility as they have better repayment capacity. Both spouses can contribute to repaying a higher EMI amount and close the home loan faster. A look at a home loan EMI calculator can give an idea to the couple about their EMI affordability.
Higher loan amount – With co-application, married couples can avail higher loans and afford to buy a home that otherwise may seem out of budget.
Tax benefits – Home loan borrowers are eligible for significant tax benefits. Apart from the Rs 1.5 lakhs under Section 80C, Rs 2 lakhs is available as tax deductions under Section 24. If a couple applies and repays the home loan, the tax deductions will naturally double, leading to more tax benefits for the household.
Stamp duty savings – Many Indian states have a reduced stamp duty rate if a woman is the co-owner or owner of the house property. Do note that stamp duty can be 5-7% of the value of the house and can, therefore, be a hefty amount.
Ease of succession – Apart from these financial benefits, a home co-owned by a couple is better placed to undergo a succession. In the event of the demise of one spouse, the home becomes the property of the surviving owner. So, the succession is much smoother in the case of co-owned properties.
There are other aspects that a married couple planning to buy their dream home must consider. Factors like the reputation of the buyer, the commuting cost from the home, the completeness of the house vis-à-vis the cost (un, semi, or fully-furnished), the valuation of the house under the existing market conditions are all factors that directly affect the finances related to the home purchase. Besides, it is always advisable to borrow from a reputed lender who offers competitive interest rates and has a solid track record in customer service excellence.
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