Home Loan Emi Calculator

Taking a loan can win you lender’s trust

Most of us try to be careful about paying dues on time, but the strike rate is rarely 100%. Some late payments have a temporary effect, maybe a one-time fine. But there are others that have short-term as well as long-term repercussions. For example, on a home loan, if you are late in paying the installment, you have to pay a penalty and it affects your credit score in the long run.

Here are a few ways you can ensure that your score remains on the higher side of the scale.

Pay on time

If you are a salaried employee who gets her pay once in about 30 days, then it is easier to schedule loan payments such as for a Housing Loan and an auto loan. But what about those who are away for long periods, say, on a merchant ship? Or those who have seasonal employment?

Know the details

Reading the details will mean you know about grace periods, penalty rates, interest rate calculation and more. Most of this is available in the loan documents and the lender’s website. You can also call the customer service center for help.

Use credit cards wisely

This is probably one of the most common loans that people take. But it is also the least understood.

Many individuals, who have had bad experiences with this product, shun it absolutely. If you had issues with paying your credit card dues in the past, and are wary of using it again, it won’t help your credit score.

Your basket of loans

Your credit profile also depends on the types of loans, i.e., your mix of secured and unsecured loans. Secured loans are those that have collateral attached, such as a home or a car loan. If you default, the lender can take away the ‘asset’. Unsecured loans, such as credit card or personal loan, are riskier for the lender because they don’t have attached collateral.

[Source: http://www.livemint.com/Money/68QAwMldEIeKmOUwye4nhO/Taking-a-loan-can-win-you-lenders-trust.html]

The Problem With Home Loans

The latest in Reserve Bank of India’s measures to protect customers with home loans is a proposal to change the way banks determine their `base rate’ – the benchmark for all floating rate loans. The need for a re-look arose because customers have been complaining of a raw deal in pricing.

In recent years RBI has taken a number of measures to provide a better deal for home loan borrowers. The introduction of base rate ensured that banks do not reduce rates only for new customers by playing with the interest spread. In the past banks could play with the spread as they would lend below the prime lending rate (their earlier benchmark) for new customers while old customers continued to pay over the PLR.  This was not possible with the `base rate’ which was also the floor rate for pricing. In June 2012 RBI forbade banks from imposing a penalty on pre-payment of home loans irrespective of whether the loans were being refinanced or repaid. This made it possible for disgruntled borrowers to move away to rivals if their loans were not re-priced when interest rates were falling.

But there are a number of areas RBI could look into as part of its consumer protection initiative. Here are a few.

Compulsory insurance: Banks have an interest in the property mortgaged with them and they need to ensure that it is protected against any eventuality. At the same time banks also gain by selling insurance policies.  But what needs to be insured is the cost of construction and not the cost of land. 

A 1000 square foot house may cost Rs 2 crore in Mumbai but the cost of construction would be around Rs 20 lakh. So there is no need of buying property insurance for the whole loan amount. Yet many banks insist that the buyer pay 15-year insurance premium upfront based on the market value of the property rather than the construction cost. Also in cities like Mumbai, the property is owned by the cooperative society which is required to insure the property. It is therefore not clear whether the bank’s insurance policy will pay a claim when the housing society is also making a claim for the property damage.

Non-intimation of interest rate changes:  Most home loan borrowers focus on the interest rate at the time of availing home loans. But floating rates are dynamic and vary from time to time. The borrower is not aware of this because while rates vary, the equated monthly installment or EMI does not. Banks merely change the tenure of the loan. So in a rising interest rate regime it is not unusual for borrowers to find that their principal loan amount is unchanged even after years of repayment.  Very rarely does a bank communicate to the borrower changes in interest rates.

Notice of intimation of mortgage: In Maharashtra the government has made it compulsory for all mortgage interests to be registered. This is aimed at preventing fraudulent sale of the property even as a loan is outstanding.  While the objective is laudable, the trouble is with the process. Although the law actually protects the bank’s interest lenders have shifted the onus on the borrower.  Rather than use their institutional clout to facilitate smooth registration, borrowers are forced to approach agents and spend a few thousands to complete this process.

No refinancing of existing loans:  Lenders often poach from home loan borrowers of other institutions. But when it comes to their existing customer they do not offer them the benefit of new rates.  If there is a special scheme running in the bank, existing borrowers are not informed of it. Also banks charge customers a processing fee even when their loan is refinanced within by their own bank but under a different scheme.

Complex pricing: Some banks have resorted to complicating the pricing of home loans introducing interest free years in middle of the tenure of the loan. Innovation in financial products are good only as long as they do not obscure pricing. Borrowers need to have the opportunity to compare the cost of one home loan against another.  One way to make the pricing transparent is to disclose the cost in the form of annualised yield to the lender based on prevailing rates.

Source: http://blogs.timesofindia.indiatimes.com/small-change/the-problem-with-home-loans/

Knowing What an Investment Property Loan Is

Do not get confused, the term investment property loan simply means a loan for investment of properties. These properties to be invested on are deemed to be profitable in the future that is why people loan to buy them. Presently, the real estate industry has become a lucrative business. A lot of realtors have testified on how they have come from rags to riches after getting into the real estate business. Depending on your talent and the circumstances, loaning to invest on a property may provide you with a good chance of building equity while nurturing the potential of capital gains as the value of the property appreciates over time. If you have the ability, it is definitely not a bad endeavor to try.

An investment property loan can be generally classified into two: residential and commercial. A residential loan is associated with investing residential properties like apartments, condos, buildings (with at least 5 units), stores, or warehouses. They are usually bought for expected future appreciation and rental income. On the other hand, a commercial loan is the one associated with investing on business and commercial areas. They are often more costly since bigger income is also expected to come from them.

Individuals are not the only ones loaning to invest on properties though. Quite a number of real estate investors in the U.S. make use of investment property loans in acquiring real estates too. There are two basic advantages on this. They can benefit from capital growth and tax deductions. Another important benefit comes from "negative gearing".

In essence, the word "gearing" means borrowing for investment. A negatively geared investment means it is a property purchased using a Property Loan Emi Calculator where the expected income (after all the expense deductions) from the investment is less than the annual payable interest. This gives the investor a substantial tax benefit since they may deduct the cost of owning an investment property from their income which is taxable.

An investment property loan can come in different shapes and sizes depending on the requirements of the investors. They may be offered as interim, long-term or short-term loans. If you are interested in engaging into this kind of investment, you should make sure that you are knowledgeable of the terms of the loan. Make sure that you understand the interest rate and the time period of it. You must also keep track of the schedule. You want extra profit and not bigger credit.

There are quite a number of reputable investment property loans in the U.S. Most of them do not provide any limit on the number of properties you could own. They also offer adjustable mortgage rates and they have low down payment options. This is a great help because you can simply use the spare money to repair or renovate the property for future profitable use like reselling it or having it rented. A lot of loan providers also offer application online meaning you will not have to waste time setting an appointment with them or going to their office. Their online service allows quick and easy processing of your application for loan.

[Source: http://ezinearticles.com/?Knowing-What-an-Investment-Property-Loan-Is&id=3284349]

How to Calculate the Proceeds of Your Home Sale

Selling a home takes a lot of hard work on the part of the home sellers especially if they are doing it on their own. A major part of the process involves a lot of calculating numbers from setting the home price, taxes and legal fees to the amount of profit the seller is going to get. But of course, even before the sale is completed, every seller would want to know the net proceeds he or she will get.

The money you will have when by the closing of the home sale transaction will be the total sale price of the property. However, you won't be able to keep the entire amount as you may need to pay for debts, liens and other charges against the property. So, your net proceeds will actually be the total sale price minus the charges which mostly make up the closing costs.

Below are several important fees that are normally paid out of the sale proceeds. Knowing these charges as well as setting a fair market value for your home will help you accurately calculate your potential net profit.

Attorney's fees. Every home seller will need the help of a real estate lawyer. The attorney plays a vital role in the financial transaction not only as an advisor but also as an escrow agent when you need a third party to keep the deposit or down payment. The fee is either a flat fee at a minimum of about $350 or by the hour.

Disbursements. These refer to expenses incurred by a lawyer on behalf of the seller such as the mortgage discharge fee paid to land titles, title search fees, couriers and other charges.

Property taxes. These taxes are paid every year. However, this can be negotiated as to who will should the payment.

Transfer taxes. This is a tax that may be implemented by states, counties or municipalities on transferring real estate property within the jurisdiction. Transfer taxes may range from a small of .01% to 2.2%. It is best that before selling your home, you check your area's rates from the Recorder of Deeds, a title company or a realtor.

Mortgage. The balance of your mortgage will be paid out of the sale proceeds. Unless your mortgage is in good standing, you will also have to pay for mortgage penalty and a discharge fee paid to the lender. All mortgage payments due on or before the possession date will have to be paid by the seller.

Home Loan India. If there's a home equity loan or line of credit secured on your home such as via collateral mortgage or caveat, it must be paid out of the sale proceeds. Also, payment for any home renovation loan will have to be taken out of the proceeds.

Home warranty. This guarantees the buyer that all mechanical and electrical appliances in the home are in good working condition on the day of closing up to the first year of ownership. A warranty costs at a minimum of $350.

[Source: http://ezinearticles.com/?How-To-Calculate-The-Proceeds-Of-Your-Home-Sale&id=1208280]

Knowing Your Monthly Loan Payment through an Emi calculator housing loan

A dream is fulfilled when we own a house. Buying a home can be a little difficult with no economical guidance. However one needs to possess adequate funds to buy houses or rent them in any decent locality. Unfortunately, there can be times where there is a shortage of money that can act as a roadblock towards achieving your long lasting dream. That is when a home loan helps a person out. They provide people with the finance needed to build a house for you and your family. Their main aim is to see you smile and live happily under one roof.

Many banks today offer Emi calculator housing loan or mortgage loans at their own interest rates. After you avail a loan, there is a fixed interest rate designated which will not change throughout the duration of the loan. Even if the interest rate changes, it will not change the rates of the loan you have undertaken. Monthly payments also called as EMI's (Equated Monthly Installments) are needed to be made along with the interest rate. It is a fixed amount made by the borrower to the bank or financial institution every month. They are used to pay off both interest and the principal amount every month throughout the loan tenure. At the end of the payment schedule, you have to pay the unpaid amount in a lump sum. There are components that prove essential for calculating the EMI through a Home loan calculator.

1. Type of the Property: It is important to know the type of property for which one is seeking for a loan. A home loan can be for a property that is a ready to move in property, under construction, self-construction or for home improvement. Different types of loan are available for each of them.

2. Loan Term: Various banks and financial institutions provide with their own tenure and repayment period. They can go up to 25 years. EMI's are calculated after knowing the term of the loan.

3. Rates of Interest: There are two types of interest rates to choose from. Fixed rates are the ones that don't change throughout the tenure of the loan. In floating rates though, the rate keeps on changing depending upon the market conditions. It is important to choose the right one for you.

An Emi calculator housing loan provides a person with the convenience to know what the EMI amount will be if a loan is availed. They are available on the website of the banks and financial corporations. With each one of these banking firms offering their own interest rates and home loan schemes, it can be difficult for a person to choose the right one. The EMI calculator can help in this case by calculating the exact amount to be paid monthly. For example, a person avails a loan worth Rs.500, 000 for duration of 4 years and the bank has an interest rate of 7%. The calculator would show a result with an EMI of Rs.11, 973. This way one can know whether it would be feasible for him/her to pay the amount.

A Emi calculator housing loan can always help at times of financial shortage. The EMI calculator is a great way to know the money to be paid at a regular basis. This is a great instrument for EMI calculation and often comes in handy.

Article Source: http://homeloanemicalculator.tumblr.com/post/149317376185/knowing-your-monthly-loan-payment-through-an-emi

Home Loans - Possible Hurdles and Solutions

A Home Loan is a long-term legal contract between a customer (home loan seeker) and the bank. Hence it is very important for a home loan seeker to be fully aware of all the legal terms and conditions that involve in the processing of a home loan.

A home-loan seeker may face several difficulties including certain legal issues in the processing of a home loan. He/she has to be very careful and must have a good knowledge of all the legal aspects pertaining to home loan processing. The following tips will greatly help you to educate yourselves in this regard and obtain a hassle-free home loan.

1.         Through the Home Emi Calculator Home loans process starts with documentation. Documents pertaining to a property are of great value and play a key role in completing the process. So, a home loan through

seeker must be very careful when submitting the documents to the bank. Never submit any fake or unclear documents that may create confusion or misguide the banks; banks have every right to take legal action against those who misguide them.

2.         The details that you furnish in the application form should not include any discrepancy. Banks make a careful study into these details, and if they find discrepancy, your application is certain to be rejected without any prior notice.

3.         Retain all your receipts of the amount paid towards the credit card bills as banks may ask for the receipts of the payments once the details are found in CIBIL.

4.         A panel of advocates will scrutinize the documents submitted by the home loan seeker. They will obtain the search reports from the concerned sub-registrar office to find out the details of deeds and the vendors pertaining to that specific property. If they find any discrepancy in the documents, banks will ask the customer or vendor for clarification or for other supporting documents.

5.         Property that the home loan seeker intends to acquire will be evaluated by technical values, and if any find any deviations in the property, customer has to submit additional documents to support the deviations.

6.         Upon completion of the entire process, vendor has to verify all his original documents with the bank official before disbursement of the loan, and the customer has to submit latest Encumbrance Certificate (EC) recording all transactions of the property in original.

7.         Customer (home loan seeker) has to sign all the legal documents and the Home Loan Agreements in regard to the disbursement of the loan, and the property will be hypothecated to the bank till he/she repays the entire loan amount subsequent to the registration of the property. Customers are advised to carefully read the agreement copy before signing it.

8.         If the customer fails to repay the loan, banks may appoint agents to collect the easy monthly installments (EMIs) from the customer, and he/she has to co-operate with them.

9.         If the customer gets defaulted, bank can seize the property to recover the loan amount; and once this happens he/she will be added into the defaulters list of the CIBIL (Credit Information Bureau of India Ltd).

Finally, it is advisable to take as less loan amount as possible so as to save the interest paid on the loan. Also, be punctual in repaying the loans to maintain a good credit history.

[Source: http://ezinearticles.com/?Home-Loans---Possible-Hurdles-and-Solutions&id=1854622]

Banking for NRIs: It's All About Ease

 In a globalized, networked world, where business and commerce has moved from the traditional 8 hour work day, geographies and boundaries have dissolved in the face of technologies. Post liberalization, India has moved on to a less stringent exchange regime and this has made it easier for the NRIs (Non Resident Indians) to remit funds back home.

Every year, Indians living abroad use 3 types of NRI accounts to transfer funds. It's believed that remittances from NRI's abroad to India in 2010-2011 were to the tune of 55 billion US dollars.

NRI's can operate three kinds of accounts in India. All the major Indian banks, both public sector and private offer these accounts to their customers. Online money transfer from these accounts has drastically reduced the time taken for funds to be transferred to India.

Non Resident External accounts: NRE

· Funds In these accounts are held in Rupees

· NRIs can open these accounts

· Funds from abroad can be deposited in this account

· This type of account can be held jointly

· Funds in this account can be remitted to any country without requiring prior permission from the RBI.

· Nominations can be made for this type of accounts

· The interest earned on income is not subject to income tax in India.

Non Resident Ordinary accounts: NRO

· This account can be opened by an NRI or even a resident before becoming an NRI

· NRO accounts can only contain funds received in India

· The funds cannot be remitted abroad of to another NRE account

· NRO accounts can be held jointly by a resident and an NRI

· Interest earned on deposits in an NRO account is taxable as per prevailing rates in India

Non-Resident Foreign Currency Account: FCNR

This allows NRIs/PIOs to invest in deposits in India, in foreign currency. The idea is to protect the NRIs from fluctuations in the exchange rate. Currently FCNR deposits can be maintained in 6 currencies.

· US Dollars $

· Euros €

· British Pounds £

· Australian Dollars

· Canadian Dollars

· Japanese Yen ¥

FCNR accounts are an attractive way for NRIs to get a good rate of interest on their deposits.

· They can only be opened by NRIs

· The term is between 1-5 years

· These accounts can be held jointly

· Nomination facility is available

· Home Loan India can be availed against these deposits; however these loans are restricted in their use and amounts, by the law.

· The interest earned on the deposits is not taxable in India.

· The principal deposit is not taxed as Wealth Tax in India

· An overdraft of upto 90% of the deposit or Rs 1 crore, whichever is more, is generally given to a FCNR account.

[Source: http://ezinearticles.com/?Banking-for-NRIs:-Its-All-About-Ease&id=6899594]

Choosing an Online Home Loan Calculator

As the adage goes, something that cannot be measured cannot be improved. This fact is inclusive of most things in life including home loans. If you're looking to live a debt free life, first make sure you calculate how much you can afford to spend. A home loan calculator is a great tool that'll help you get an idea of the monthly and yearly payment breakdowns. The calculator allows you to assess your mortgage payment options.

While some provide a simple calculation of the monthly spending that you can afford, after you key in the interest rate and the other expenses, there are some others that are elaborate and help you calculate several things. For example, if you'd like to know the maximum housing loan amount based on the annual income and the ability to service the loan, choose from a home loan calculator that determines the affordability of your loan.

All that you've got to enter is the monthly salary, the start interest rate, the loan term period and the maximum percentage of income that you can afford to spend, and you have a calculator that tells you the maximum loan amount that you can ask, and the maximum monthly mortgage payment that you can make.

You can also find out how susceptible you are to changes in interest rates in the market. Enter the principal amount, interest rate variation and the Loan for Home period, and you can know how changes in the interest rate can affect your monthly expenditures. And if you're an investor, you can look at a home loan calculator that gives you the potential yield from your investment.

Depending on the amount that you can afford, or the interest rate or the term period that's best for you, you can choose from a loan provider. And if you've already availed a Loan for Home , the home loan calculator can help you determine the monthly income that's need to stay afloat and avoid a foreclosure. There are several variants of the calculator, make sure that you are in tune with the method of calculation with the loan provider.

Rather than having to make complex calculations, where you often lose track of what you were calculating in the first place, or ask for help from your finance consultant, it's best to use a home loan calculator that can do all the calculation for you. You end up saving time, and energy using these calculators that can easily perform the most complex of calculations. But choose from a good website, rather than visiting the first site that's thrown up on the search result.

[Source: http://ezinearticles.com/?Choosing-an-Online-Home-Loan-Calculator&id=6430000]

Home Loan Calculator, Advice, and Background

More and more people who have never owned homes before are starting to look into buying their very own, owing to a trending significant drop in interest rates. But before you go out and look for that dream home you've always wanted, you'll need to learn a lot about what to expect and the processes you would inevitably undergo. Indeed, such a big decision entails that you at least know what you're going to be delving into; and the more you know, the less complicated the procedures will be. If you are interested in getting a home loan, you can find guides, advice, information, and even a home loan calculator. Among the pieces of home loan wisdom you can garner from the site, here are a few you should know beforehand:

Home loan jargon can become really technical, so you should learn it. Since the home loan market has several various mortgage plans, each having unique features and advantages, basic jargon and technicalities like fixed and adjustable mortgage rate, FHA and VA mortgage, and others will be used quite often and in different perspectives. It would only be prudent to familiarize yourself with home loan jargon 101 as well as standard loan math-like how your mortgage rates would impact your income. Knowing about other stuff like PMI and points would also be an added advantage.

After familiarizing yourself with basics, the next thing to keep in mind is wisely choosing a lender. Only work with a trusted and reliable lender whose reputation can be confirmed from many sources. Of course hand in hand with this knows just how much of a loan you can afford; here's where a home loan calculator comes in handy. Use one to be sure of the amount you are comfortable with, and do include taxes and insurance into calculations. And a standard tip would be to make a high down payment because this would make for reduced mortgage repayments in the future.

After deciding on the lender and the amount, beware lines of credit. Do not open accounts for credit cards or the like. Opening one would negatively impact your credit history and would thus likewise negatively affect the loan type and interest rate you would be allocated. Plus, credit cards are major temptations that could get you deep in debt even without a home loan to think about anyway, so better do without it. And in the same vein, avoid closing active accounts as they help maintain your current (presumably) good credit standing.

After all this is taken into consideration, the last thing you can do to ensure a relatively easy home loan process and repayment is to not change jobs or worse, quit your job in between repayments. This is true before applying for a loan and during paying it back. A steady and solid employment history is always favorable, as in fact lenders would prefer that you've been working for the same company for at least two years before applying for a loan. Though of course this is just a preference, not a requirement.

Article Source: http://blogs.rediff.com/homeloanemicalculator/2016/08/09/home-loan-calculator/

Housing Loan Interest Rate Advice for Loan Applicants

Upon deciding on applying for a mortgage loan it is important that you be aware of the housing loan interest rate that you will be required to pay during the term of the loan. There are times when buyers get too excited about the idea of purchasing their own home that they tend to overlook the interest rate incorporated into the loan.

They only begin to notice this after a few years of paying their mortgage, and by this time the rates may be too high, especially if the loan has a variable interest rate. If you are faced with such a situation it is best that you call your mortgage provider and have the contract explained to you in detail. If you feel that it is too high, your loan manager may present you with other options such as refinancing in order to be able to save on your mortgage payments.

There are many other interest rate packages that may be offered by banks, however, these four are the most popular among property shoppers.

A fixed housing loan interest rate through Home Loan Emi Calculator is another popular choice by those who are shopping for mortgage loans because it is not affected by economic changes in the world market. Those who choose this mortgage rate package will continue to pay a fixed rate of interest regardless of how the world market is doing for the duration of the mortgage loan.

The principles of a variable housing loan rates for interest are a little harder to understand because it varies from bank to bank. You may find banks that offer lower variable interest rates than others, while some charge higher than usual. This is because variable rates of interest depend on a lot of factors, including your credit background, your ability to pay, and your standing as a Singapore citizen. It is important that you thoroughly understand the computation before you agree to the terms so as to avoid paying more than what you can afford.

To get a mortgage rate that is most suitable for your financial situation, make sure that you thoroughly research about the current mortgage rates in the market before you start doing your mortgage loan shopping. Patience and determination are also very important because running in and out of banks to meet with housing loan managers can be a tiring and time consuming task. Everything becomes worthwhile however when you are able to land a housing loan rate package that is right for you.

[Source: http://ezinearticles.com/?Housing-Loan-Interest-Rate-Advice-for-Loan-Applicants&id=6713671]

Tax Benefits Associated With Housing Loans

Multiple benefits - how?

EMI (elementary monthly installments) consists of two parts - the interest portion and principal amount. Interest paid is allowed as a tax benefit under section 24(b) (subject to restrictions), while the principle amount repaid is allowed as a deduction under section 80C.

Maximum ceiling on tax benefit

Maximum tax deduction for repayment principal component of home loan can't exceed

Rs 1, 00,000 under section 80C. One should keep in mind that other investments/contributions are also allowed as a deduction under section 80C, and this limit of Rs. 1,00,000 applies to all of them put together.

Housing loan interest deduction, on the other hand, is allowed up to a maximum amount of Rs 1, 50,000 under section 24(b). However, the acquisition or construction of the house property should be completed within 3 years from the end of financial year in which loan was taken; otherwise, the amount of interest benefit allowed is only up to Rs 30,000.

Furthermore, the above tax deduction limit u/s 24(b) is applicable only for self-occupied house property. In case of let-out or deemed to be let out house property, interest is deductible without any limit.

Starting date for claiming tax benefit

Some say that deduction on principal component of home loan under section 80C is allowed as soon as one starts repaying the home loan. Some say deduction is allowed only once the construction is completed. The law isn't clear on the matter; hence the ambiguity remains.

Interest deduction on house loan under section 24(b) is allowed only on acquisition or completion of the house property. However, interest deduction for pre-acquisition or pre-construction period is also allowed but only after acquisition or construction is complete. It is allowed in 5 equal annual installments. But even after including the above, the total deduction should not exceed Rs. 1, 50,000 per annum.

Source of home loan

Unlike section 24(b), Section 80C doesn't allow tax deduction for home loans taken from friends and relatives. For claiming tax benefit on principal component of the home loan under section 80C, you need to borrow only from the lenders specified in that section. There is no such restriction under section 24(b) of the IT Act for claiming tax benefit on interest component of the housing loan.

Purpose of housing loan - Home purchase / construction vs.

Home improvement Deduction under section 80C for principal portion of the housing loan EMI is not allowed if the home loan borrowing is for the purpose of reconstruction, renewal or repair of house property. Put simply, tax benefit under section 80C is only allowed for buying or constructing a new home. In contrast, deduction for Interest is allowed under section 24(b) even for the loan taken for the purpose of repair, renewal or reconstruction of existing house property but subject to the limit of Rs 30,000 in case of self-occupied house property. In case of let out house property, actual interest is allowed without any ceiling.

Payment Basis - Due Basis vs. Cash Basis

Tax benefit u/s 80C can be claimed only when the actual payment is made. Interest deduction u/s 24(b), on the other hand, is allowed on accrual or due basis. Put simply, unlike principal portion, interest deduction can be claimed even if not paid.

[Source: http://ezinearticles.com/?Tax-Benefits-Associated-With-Housing-Loans&id=6743691]

Home Loans are Tax Friendly

For most Indians, owning a house isn’t just an investment but pride. ‘Home- Sweet-Home’ is tailored by your tastes and relationships. It is the space of your absolute freedom. Everyone dreams of owning a house but certainly have misconceptions about it. The real-estate boom in India is attracting foreign investors too in this sector. Choosing a flat/property to your tastes is easy because you decide. But, one requires a little financial know-how before planning for it.

With the rise of housing finance institutions, owning a house is now pocket-friendly with a home loan. With the advent of selling flat/property online, the segment has become more competitive but to the convenience of the consumer. Though buying a house is an expensive proposition, growing real estate prices made almost impossible to own a house without a home loan. The home loan is such a credit facility where interest rates are cheaper and tenure is longer. Not only that, it comes with exciting tax benefits too while income tax filing.

The amount that a bank can lend is up to 80% of the property value. This depends up on various factors to check the eligibility. Banks are strict with these checks and otherwise bad loans can become burden for them. Every lender tries to ensure the borrower’s capacity to repay the equated monthly installments (EMIs) in time and repay the principal amount. To do this, they would look up to your credit history, current assets, liabilities and other financial details.

Tax Planning:

The biggest benefit in availing home loan is that one can plan their tax savings after considering all deduction benefits while filing I.T.Return. All home financing companies including banks usually give a provisional certificate at the start of the year which is based on EMIs and break up of principal and interest. This certificate will give you a fair indication of how much principal has to be repaid and how much interest has to be paid for that year. Based on this, you can plan for other investments. At the end of the year, you will get an original certificate based on the actual EMIs paid for that year. This certificate has to be submitted along with the income tax returns to claim the deduction.

Let us now dwell upon various tax benefits on availing home loan:

Any home loan will have two components in it namely, principal and interest. While income tax efiling one can get tax benefits through home loan under two different Sections of Income Tax Act.

Under Section 24– Deduction on interest on home loan for self-occupied property up to Rs 2 lakh.

Under Section 80C– Deduction on repayment of principal amount on home loan up to Rs 1.5 lakh.

Deductions in both components of a home loan are therefore governed by two different sections of the same Income Tax Act.  If the above sections are expanded in detail:

Tax benefit on Principal Amount:

The amount paid as repayment of Principal Amount of home loan by an Individual/HUF (Hindu Undivided Family) is allowed as tax deduction under section 80Cof Income Tax Act while filing I.T.Return. The maximum tax deduction allowed under Section 80C is Rs. 1, 50,000. (Increased from 1 Lakh to Rs. 1.5 Lakh in Budget 2014). The Amount paid as stamp duty & registration fee is also allowed as tax deduction under Section 80C even if the loan is not taken. However it is important to note that tax benefit of home loan under this section for the repayment of principal part of it is allowed only after the construction is complete and the completion certificate has been awarded. No deduction would be allowed for under construction properties.

Tax benefit on Interest Amount:

Tax Benefit on Home Loan for payment of Interest is allowed as a deduction while filing income tax return under section 24 of Income Tax Act. As per Section 24, the income from house property shall be reduced by the amount of interest paid on home loan where the loan has been taken for the purpose of Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property.

The maximum tax deduction allowed under Section 24 of a self-occupied property is subject to a maximum limit of Rs. 2 Lakhs (increased from 1.5 Lakhs to Rs. 2 Lakhs in the 2014 Budget). In case the property for which the Home Loan has been taken is not self-occupied, no maximum limit has been prescribed in this case and the taxpayer can take tax deduction of the whole interest amount under this section.  This is the best part of it because you can avail the same benefit upon all interest paid if you rented your house without you (owner) residing in it.

Using the above sections to the most of our benefit, the following opportunities can be explored:

Taking a joint loan- One can avail home loan with co-borrower as spouse, if working. All benefits under sections 80C and 24 of Income Tax Act can be enjoyed for each borrower. If you take home loan under 50:50 ratio, the overall tax savings of the household can be increased. The spouse earning more should have more portion of the loan to avail maximum benefits.

HRA (House Rent Allowance) Benefit- If you stay in a rented house and paying rent and at the same time availed a home loan for your own home, you can avail benefits of both HRA and home loan. This is subject to your home receiving rental income which is taxable.

Interest Rates on your home loans:

RBI has maintained status quo in the first policy of this financial year and the governor insisted upon monetary transmission of benefits of previous repo cuts.

Many banks have reduce their loan rates by almost 25 basis points as a result of which an interest rate war has triggered which will soon be followed by other lenders too. Most lenders at present can offer home loans at 9-10 percent. This competition would benefit home loan consumers, who have been struggling under high EMIs for years. As inflation is under control, one may expect more rate cuts in near future.

            One can apply for a home loan online with all end to end assistance in documentation and consultation process. To avail home loans hassle free and get best quotes, calculate your EMI’s visit: home loan emi calculator

emi calculator housing loan

If you can dream about owning a house, you can surely own it! With the right kind of knowledge about the home loan product it can be quite fun and exciting experience. Today, there are lots of government and private sector banks & finance firms that offers customized forms of home loans to their clients. People can approach these banks and private financial firms to get the best deals on home loan interest rates and other processing charges. It is obvious that owning a house means lots of pros and cons associated with it before finalizing a bank. When you visit a bank or an agent they will ask you to purchase a home loan,  with protection cover or other protection commodities along with housing finance. They will assure you that it will be added to your loan amount or at times an individual is completely clueless on how much loan amount he or she needs on the grounds of place for living, income source, building or society requirements, interest rate applicable, EMI to pay, etc. They feel like lost in a sea of confusion without the right form of knowledge. Relax! Finding the right home loan amount and understanding various jargons & terms associated with it is quite easy with the help of home loan EMI calculators offered by banks & firms online. Here are some tips that will help you find the right home loan in an easy manner:

Today, India’s leading private sector banks & firms are offering housing finance with new structure of loans that are developed to meet the needs of house buyers from every section of the society. However, before choosing a particular loan, it is very important to have a comprehension about the most important constituent of the loan – the EMI (Equated Monthly Installment). An EMI is a certain amount of money that an individual pays to the bank as pre-decided in the terms & conditions of the loan policy towards obtaining the legal possession of the house in near future. It is paid each calendar month, to the lender, for clearing their outstanding loan.

Your home loan EMI is calculated based on three things: Enter your home loan required amount, choose an interest rate applicable by home loan provider and select the tenure you wish to repay loans. Once you enter these details your calculated EMI amount along with interest applicable will be displayed for your information.

The home loan EMI calculator helps you understand the regular EMIs applicable on your housing finance. These calculators help you cut down the hassles of usually tedious and time consuming manual calculation of EMI applicable on your home loan. It is simplified and loaded with all the essential data, including amortization details and the ability to alter components like interest rates and tenure to try other types of permutation and combinations. This will help you make the conditions of repayment feasible as per your requirements. The most important benefit is you can plan your budget well in advance and keep aside the monthly EMI amount towards your housing loan.

While using emi calculator housing loan individual should consider charges applicable like processing fees of the loan, pre-closure charges, type of interest rates (fixed or floating basis), etc. Each EMI of the loan amount pays a part of the principal that you owe to the bank along with the decided interest rate on it. Banks and financial firms, have a certain mathematical formula to calculate the EMI based on loan amount, interest applicable, your income sources and other important details.

For a given loan amount, tenure and interest rate, the EMI calculated and the amortization schedule offered by banks and private financial firms will be similar. The pattern of reduction of principal amount through payment of each EMI will follow a similar trend across all financial institutions. Also, individual should note that the initial EMIs contribute more towards payment of interest due as compared to the principal amount. As the tenure progresses, subsequent EMIs will clear off the principal amount. Thus, by paying each EMI to bank you get an inch closer towards clearing off the debt and owning your dream home forever.

Source: http://homeloanemicalculator.tumblr.com/post/146938162180/emi-calculator-housing-loan

home loan emi calculator

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering.

At present, customers have a plethora of options available from banks and financial institutions with regards to home loans and their interest rates. Today, banks and financial institutions also offer flexible interest rates for different income categories. Here's a few tips to negotiate your interest rates on home loans:

Information:

The first and the most important strategy to negotiate your interest rate on home loans is to constantly update yourself with what different lenders are offering. One should check both the fixed and variable home loan rate and then compare the two against each other. Figuring out the loan eligibility on the basis of information collected from agents is another crucial pre-requisite before deciding to opt for a home loan. Such discussions also help consumers in deciding relevant issues such as type of interest rate tenure, other charges etc. Exercises like this will also protect the borrower from getting misled by lenders who often use various jargons to lure customers.

Having all the information you require can also be useful for someone who has already availed a home loan. It will help him/her learn if they are paying an extra amount and also if another bank or financial institution could provide a better rate. The facts on the rates offered by different banks and financial institutions will help the borrower discuss the situation with more authority and this may further lead to the lender agreeing to a better rate for the existing home loan. This helps as from a lender's point of view it is easier to retain an existing customer than to get a new one.

One could also opt for a balance transfer in case another bank or financial institution is providing a better rate, but such a decision should be taken only after weighing all the pros and cons. The borrower should get a clarification from the new prospective lender on all start-up fees involved with refinancing the existing home loan besides asking the existing lender to explain the costs involved in paying out the loan. The transfer process should only be initiated after there is a clear indication that the move will save money.

Credit score:

In today's time, a good credit score helps the borrower negotiate his/her loan and interest rate, processing fees, pre-payment penalty and all the other charges involved while purchasing a property. Most banks and financial institutions believe that customers with a sound credit rating are less likely to default on the loan amount. Borrowers with salary accounts or credit cards can also avail further discounts on processing fees and prepayment penalties from banks.

In case one has a poor credit score certain steps should be undertaken to help set things right. One could take start making payments, whenever due without delaying them any further, by not utilizing the maximum limit on your credit card , pay off any debt etc.

Documentation:

There is no substitute to effective documentation while availing home loans. This gives banks the confidence about the borrower's credibility and repayment capacities thus helping in securing loans. The document filing is also an important step in this process as it is highly unlikely for a bank/lender to offer a best possible quote until the documents are submitted. One must be completely honest about existing debts, credit cards, and repayment history to all lenders to give a clear idea about their existing financial position. This will also help individuals to negotiate home loans better by enhancing their credibility as banks will also check the same with the Credit Bureau about the credit worthiness of the individual.

Another important point to keep in mind before availing a home loan is approaching prospective lenders only after the property is finalized and disbursement is required in the next few days. Most lenders are interested only in disbursements and reserve their best rates only for immediate disbursement cases.

Time your loan:

Borrowers should look at timing their loans towards the end of the month or quarter for better rates. Banks and financial institutions have pre-defined sales targets for its staff towards the end of the month/quarter and may offer competitive rates to complete their targets.

One should also look at timing their loans towards the festive season as lenders tend provide incentives in terms of lower interest rates and processing fees during this period to encourage sales.

Larger customer:

Bundling loan requests with friends & relatives to offer a larger business opportunity to banks and financial institutions is another tactic one can use for negotiating home loan rates. This is possible as banks and financial institutions would be saving on their legal and technical costs relating to property title, valuations, etc.

Conclusion:

Getting a home loan is becoming a hassle free/simple procedure with financial institutions increasingly focusing on shortening the entire process. Lenders are giving applicants an option to fill the application form online besides providing on-ground assistance of home loan advisors to assist them. With the increasing competition, financial institutions may go all out to offer home loans at competitive rates and make the entire process simple, but customers should sign up for home loan emi calculator only after ensuring that they are getting the best deal from their financial institution.

Source: http://www.articles.howto-tips.com/HowTo-Article-Directory/loan-requests-better-home-loan-rates