home loans

Are low rate home loans a good option for home buyers?

homeloans2Identifying loans with a lower rate of interest doesn’t create any problem for you today. You may find it a bit difficult to compare home loans over the internet due to the competitive nature of the financial market. You must know if the lowest interest rate is in your best interest. If that is in your interest, you must learn how to make the most of it.

The Introductory Rate

In an attempt to attract fresh customers, it’s natural for the loan issuing companies to provide a honeymoon or introductory rate to the applicants. These loans will eventually prove to be more expensive although their interest rates may seem much lower compared to other loans. It’s very important for the borrowers to understand certain facts while applying for home loans. Such facts may include introductory period rate, whether it’s necessary for you to pay earlier rate before the honeymoon period comes to an end and the exceptions. The fact that it will help a borrower save dollars worth thousands in the long run makes it all the more lucrative for you to sign up for such loans.
Variable or fixed rate

A borrower needs to study the market conditions more carefully prior to applying for a loan as it helps him choose between a fixed or variable rate of interest. This is one of the most vital steps of loan searching. Going for a fixed rate loan seems worthwhile when such rates are not more than one percent over variable mortgages. Again, your decision is bound to be influenced by more than one variable.
Are these loans worth great value?

Introductory home loan offers may seem more appealing to home buyers, although the long-term worth of the loan is always the key to a successful decision. The road may seem uneven when you apply for an introductory low rate as you must consider situations when the rate pushes up to a much higher figure than what it’s worth under normal conditions. You mustn’t fall prey to a flashy initial rate.

Introductory home loans are now raising questions in the minds of home buyers as they offer a discounted rate during the short run, which is often termed as the honeymoon period. Such a honeymoon offer will usually last for about six months beyond which it will revert back to a much higher rate. This higher variable rate may initially prove beneficial for the loan applicant depending on his financial situation, but it may not prove worthwhile as it often demands more than the market average.

In comparison to a home loan worth a good value rate, the loans offering honeymoon rates don’t prove right from the very beginning. The borrowers end up paying thousands of dollars by the end of the loan term. When a certain portion of your loan is fixed, it actually protects your finances from sudden market fluctuations. A variable rate changes with the market condition; that’s one reason why a loan with a good value rate for a certain period of time is considered more beneficial. You must take factors like your current annual fees, discharge fees and establishment fees into account while determining whether the loan is actually good for you. Make sure you read through the offer document carefully prior to signing up.


Tips on home loans for first time buyers

There are a few challenges associated with buying home for the first time. You may either need to stay on rent or accept the first offer that falls within your budget. Prior to buying a house you’ll need to consider a number of things. It will help you to make the most out of your purchase and simplify the entire buying process. This article will throw some light on what you may expect within your budget and yet can turn your life easier after buying your first home.

Most of your loved ones will agree that they got overwhelmed and excited while buying their home. Arranging for the cash to make their down payment is the first big hurdle that all home buyers need to cross. You may seek guidance from the first time home buyer programs offered by the state and federal govt.

For consumers that don’t have much of a credit history or earn a lower income, it is even more difficult to find a lender. That’s why it is even more important for the first time home buyers to seek financial assistance from private home loan services.

Let’s consider a few types of home loans that the first time home buyers may consider –

First Time Buyer Loans

Lenders that are approved under the FHA (Federal Housing Administration) are known to offer loans that can help the first time home buyers. In comparison with the conventional loans, the down payment and income requirements are lesser for these loans and they offer adjustable or fixed rate of interest besides higher loan-to-value rates. Value of property worth 97% can be borrowed by the first-time home buyers as per the FHA norms. The debt-to-income ratio allowed by the FHA is also a bit higher. This is the ratio of the percentage of your income that you spend towards debt repayments to the rate you’ll achieve under conventional lenders. What you get is a gift to meet your closing costs and your entire down payment.as

Down Payment Assistance Loans

First time borrowers may achieve down payment loans from lenders. These borrowers may seek a loan that can assist in meeting the down payment and move up till meeting the entire financing of their first home. The economy is stimulated by these loans and the housing market also gains more customers out of the low income segment.

Graduated Payment Loans

Individuals falling into the low-income segment may opt for the Graduated payment mortgages. It’s a bit different from the conventional loans. These loans are issued to individuals that foresee a growth in terms of earning for the following years. The repayment begins with much lower amounts; such amounts won’t even cove the loan interest initially, but they may be raised each month. A conventional mortgage can help an individual apply for a loan under this program.

This article is aimed at showing you the right way towards living up to challenges. You may try out a number of loan service providers, but you need to be sure that they have been in business for a while. You may try quality loan options like Newcastle Permanent’s home loan for first time buyers and check things out for yourself.


Home Loan Tips – 5 Benefits You Get FromHome Loan

For the salaried class home loans is like a trump card which makes them eligible for acquiring the piece of real – estate at a young age with financial leverage. It would have really been a tough time for them, if the facility of home loan is not being available and perhaps one could have only thought of possessing their dream home after retirement or many would have compromised with that desire by prioritizing their social financial obligations and not been left with enough cash to chase their dreams of owning a house

save_moneyHome loans have not only detangled our life from the financial burden but also it comes with certain benefits…who doesn’t prefer an icing on the cake huh…

EMI options to ease your financial liabilities

The home loan shares your financial liabilities since whatever you pay for the monthly EMI, you will still be having your finances to place to maintain a decent life –stlye. Moreover you get the luxury to flaunt to dream house to everyone, thus adding an self actualization value to it…and trust me…it’s priceless

Tenure to decide on

The home loan provides you the option of picking tenure suitable for you. It’s important to pick up the tenure properly since your loan eligibility increases with the longer tenure or the EMI deducted lessens but on the long run, you end up paying more

Flexible options to choose from

Home loans come with different EMI options like fixed rate or variable rate. Fixed rate remained fixed throughout the repayment period of the loans whereas in flexible home loans the interest varies from time to time as per the socio – economic situations as well the Government regulations. If the economic situation is favourable then the interest rate goes down and vice – versa. By the way, if you have a co – applicant who is a senior citizen you get a rebate of .5% and financially strong applicant will add to the eligibility amount of the home loan. If you have opted for fixed rate of interest then the foreclosure of the loan will attract you a percentage of penalties but if you have opted for flexible home – loan interest, then you can repay back the entire outstanding money as per your convenience without any charges

Tax benefits

The home loans EMI attract full Tax Benefits. For instance if you are paying an EMI of Rs. 35,000 per month, it means this amount will earn you tax benefit under section 80 C

Increase your credit ratings if you are repaying it soberly

If you are paying the home loans on scheduled date then your personal credit ratings get improved. Even with time if you have a good loan repayment history you may add top – up on your existing home – loans. You are eligible for top – ups only after a certain period of time as well as repayment of certain percentage of the principal amount

Another important aspect you should not overlook when you are taking your home loan and that is to insure your home loan. It takes care of the unwanted emergencies ensuring that the house stays with your family in case of any, God forbidden, unforeseen and unexpected situations…chill…i am not scaring you, just sensitizing you about the hard face of truth… All the best…


25 Wonderful Ways to Stay Frugal and Beat Debt

get rid of itBeing frugal is always a challenge. However, the positive outcomes help you lead a better life. Therefore, we should all the time maintain frugality in our life whether it is our day-to-day essentials or entertainment activities. Given below are 25 wonderful techniques to remain frugal and overcome the curse of being indebted:

1) Use coupons prudently – Clipping couponsfor the commodities you use on a daily basis is a good idea.

2) Go for a balance transfer credit card – When you have a number of credit cards with high balances and interest rates, transfer them to one single card with an affordable rate.

3) Make your lunch at home – When you’re going to the office, prepare your lunch and brown bag it to work.

4) Raise your insurance deductible – This will help you reduce your annual insurance costs.

5) Take the bus to office – Don’t drive too often if it’s not needed. Take a bus en route to your workplace. Cycling or walking to office is not bad either.

6) Wash your clothes on your own: Don’t send your clothes to a laundry. Instead, use your home washing machine and natural detergents to clean them.

7) Stop impulse buying: Your impulse buying behavior might make you fall in debt very soon. So, get rid of it immediately.

8) Hire books and DVDs from the library: Thisalso controls your needless spending on leisure and entertainment.

9) Share your meal with others: When you are eating outside with your friends or known people, request them to contribute for the meal. In this way, you can cut down your dining costs outside.

10) Buy your gadgets online: Be it an iPhone or an android phone, buy it online to save a lot of money. Online buying always involves a lot of discounts and offers and is a more preferred option than offline buying.

11) If needed, buy used items: Craigslist is a good resource of useditems in good condition.

12) Quit smoking and drinking: This is difficult but essential to be frugal in life.

13) Learn minor house repairs: This is quiteimportant. Doing small house repairs without anybody’s help also brings a sense of satisfaction in you.

14) Stop borrowing without need: Some of us have the habit of applying for new credit cards, home loans, auto loans, and other varietiesof creditevenwhen we don’t need them. This should be stopped at any cost.

15) Don’t buy insurance cover which you don’t need: Unnecessarycoverwill onlyraise your financialdifficulties.

16) Create a sensible budget and follow it: See the areas of your income and expenditure. Set a rational budget and follow it sincerely. Try to save some money every month.

17) Plan your trips in off season: Traveling in off season is a realistic way of saving money.

18) Drive slowly and cautiously: Driving fast will cost you more in terms of fuel. You can also be booked for a speeding ticket.

19) Get sample medicines from doctors: You can always getsample medications from your physician when they get them for free.

20) Look after yourself: You should build up a consciousness of healthy living. Eat the right food, exercise daily, and maintain your dental hygiene.

21) Increase your water intake: Rather than sipping on artificial beverages, drinking water is a much better and hygienic way of quenching thirst.  

22) Be a wise shopper: Only buy things that you can’t live without.

23) Cook at home: Rather than buying expensive and junk food from outside,try to cook healthy and delicious food in your home.

24) Drink coffee at home: Your coffeemaker is your best friendhere.

25) Save on telephone costs: If you have a mobile phone, just do away with your land line phone.

Follow these tips and soon you will notice a drastic improvement in your lifestyle which will make you a better personal finance manager altogether.

Staying out of debt is becoming more popular with young people today. Many college students are choosing to take online courses in order to have time to work during the day, as many top universities, for example Lubbock Christian Online, are offering their online versions of their best courses.


Relation Between Income Tax Returns And Your House Loan

Relation Between Income Tax Returns And Your House Loan

Home loans and rents payable, both play a significant role in offering great income tax returns. One must understand, that loans are a dicey investment, as irrespective of however much one may save, they pay a lot more than that in interests.

One has to find the right bank, which does not cheat them, but provides genuine assistance. When one takes a home loan, they are liable for a tax rebate under the law. This rebate is received in the form of Income Tax Returns. These returns usually arrive a few months after one has paid the taxes.

So how are taxes related to home loans?

Impact Of A Home Loan On Taxation
When one acquires a home loan, he/she is entitled to a tax rebate, of the amount equivalent to the payment of EMIs each month. This total cannot exceed a particular amount yearly. Thus, when one files tax papers, they need to attach loan papers and payment receipts along with them, as evidence. The IT department proofreads these, and based on it, a tax rebate is provided. One must remember that there are different clauses when one has rented out the house, for which they have acquired the loan.

Rented House Returns Policy
When one rents out a loaned property, the income received in the form of rents is taxable. Thus, one needs to pay taxes in proportion to the amount they earn from the loaned house. This is added to the Annual Income, and tax reductions are then calculated in proportion to one’s income bracket. One is still liable to receive tax rebate on the amount paid as EMIs towards the loan repayment.

On a whole, a careful understanding on this concept is a must. Many a time, people do not consider house rent received as taxable, and thus, struggle when less or no tax returns are received.

The confusion behind owner name
At times, individuals have a tendency to purchase a house in their name, but apply for a loan in the name of a senior citizen to receive higher incentives.

 

So is one entitled to a tax rebate in such a case? No! Tax rebates are provided only if the owner of the house and the loan claimant are the same.

So how can one get better tax returns then? Simply make the senior citizen the Co-Owner of the house. That will help one to receive a tax rebate, and the loan too, at a decreased interest percentage.

Double Claims
At times, another interesting way to get high income tax returns on home loans, is to file things in the name of multiple parties. So, if a husband and wife, both file a tax return for the same property, both are entitled to a tax rebate. However, there are a couple of conditions for the same. Firstly, the home loan must be acquired in the name of both parties, and secondly, both parties i.e. the husband and the wife should be the ‘co-owner’ of the house.

Bruce Jordan is an expert financial adviser who has written numerous blogs on finance. He has beem using a Bill Pay software for his phone which helps him keep a track on all his bills on the run.


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