ADVANTAGES OF TAKING A HOUSING LOAN IN BANGALORE

ADVANTAGES OF TAKING A HOUSING LOAN IN BANGALORE Buying a house is a big step. It is a source

of anxiety, frustration and a huge sense of accomplishment. With the zooming property rates, it is difficult a buy a house through our savings entirely. Almost all of us have a to avail a house loan. Usually, a housing loan is one of the biggest liabilities. Considering the huge amount and the long tenure involved, however your house loan also offers you some benefits. The below write-up highlights the advantages of taking a housing loan.

Sense of accomplishmentBuying a house is one of the

biggest financial investments you may make in your lifetime and that's not just because of the sentimental value. The sum that most of us sink into our house does make it the largest component of our investment portfolio.

Capital Appreciation

For each one of us who has seen property prices boom over the last five years, the prospect of mouth watering capital appreciation is the biggest argument for buying a house. Construction costs alone, which account for more than 70 per cent of the flat's cost, have risen at 15 per cent annually in the past decade. Rents too seem to keep up with inflation making a house one of the few investments can shield you from inflation for the long term.

Low interest rate Buying a house is a long-term decision of over a 10-year period the

interest rates may go through several up and down cycles. Therefore, you can be sure that you will benefit from falling rates at some point in the cycle.There could also be situations in which the interest rates fall, allowing you to prepay your loan and own your house. For instance, those who bought property in 1995, at an interest rate of 18 per cent, not only saw interest rates fall dramatically over the next decade, to bottom out at about 7.5 per cent, property prices too appreciated steeply. This works as a double boost to wealth.The best way to manage borrowing costs is by actively managing your housing loans.That’s not as difficult as it is sounds. Banks and housing loan lenders often give new borrowers much better rates than existing borrowers. During the uptick of the interest rate cycle, if your cost of borrowing increases by more than 2 percentage points, pay 0.5 per cent of the loan outstanding as processing fee (conversion charge) to your lender to avail the rates offered to the new borrowers.

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