Home Loan: Is this the right time to take a home loan? Understand the full details..

Buying a house is everyone's dream. However, not everyone has the necessary budget to buy a house. For this, we resort to home loans. But, it is very important to take a home loan at the right time. Before taking a home loan, you should make a decision keeping in mind the interest rate, market condition, your financial health, and government policies. But, the question is, will it be right to take a home loan now? Let us know in detail.

Interest rate Is this the right time?

RBI has reduced the repo rate by 25 bps from 6.50 percent to 6.25 percent in its February MPC meeting. Atul Monga, co-founder and CEO of Basic Home Loan, says that the Monetary Policy Committee has cut the rate for the first time in five years. Based on this, financial institutions have also reduced the interest rate of home loans. This is a big relief for those who want to take a home loan.

Small and consistent savings on EMI
According to Atul Monga, consumers taking home loans have benefited from RBI's decision. This will reduce their loan cost and make buying a house easier. Due to the reduction in interest rate, their EMI will be reduced, thus reducing the financial burden on the home buyers. Let's understand its calculation.

For example, suppose you have taken a loan of Rs 30 lakh at the rate of 8.75 percent for 30 years. Earlier your monthly EMI was around Rs 23,601. However, now due to the change in interest rate, their EMI will be reduced to Rs 23,067. In this way, a total of Rs 1,92,098 will be saved. If you pay EMI equal to the earlier amount, then your loan will end soon.

In such a situation, this is the right time to take a home loan for those people who were hesitant to buy a house due to high interest rates and skyrocketing property prices. Now they can take advantage of the current situation and invest in their favorite residential project. However, before making any decision, you should consider many important aspects, such as market trends, the location of the property, and your financial stability.

Home loan refinance options.

Many times, home loan borrowers may feel that there has been a slight reduction in their monthly EMI. But, this small reduction will also give them the benefit of big savings in the long run. If your credit score is good, then you can get the option of refinancing at an even better interest rate. Banks and financial institutions also give loans keeping in mind low risk.

The housing sector will gain pace.

RBI wants to promote economic development by making housing more accessible. This will increase the demand for residential properties, especially in areas where basic amenities are available and property prices have increased due to better facilities. In such a situation, getting a loan at a low interest rate will reduce the pressure caused by high property prices, especially in metros.

Benefits of home loan

The government also runs a scheme to help home buyers. For example, if you buy a house for the first time under the Pradhan Mantri Awas Yojana (PMAY) scheme, you will get the benefit of a subsidy. You can also avail of tax exemption under section 80C and 24 (b) on home loans in the old tax regime. If you take a joint home loan with your wife or mother, then you can get some additional discount on the interest rate.

Keep these things in mind while buying a home.

Your financial condition is the most important while taking a home loan. You should ask yourself some questions. Such as:

Is your monthly income stable?
Do you have an emergency fund?
Are you ready to bear the burden of EMI?
Have you saved enough for the down payment?

If your financial position is strong and you can do long-term planning, then taking a home loan now can be a good option. Economic experts believe that RBI can cut the repo rate further this year. You will also get the benefit of this.

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