Home Loan Benefits for the First Time Home Buyers

Benefits of Home Loan for the First Time Home Buyers

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Don’t own a home yet? What are you waiting for? Money? Okay, that makes sense. But hold on, you may not need as much as you think you do. There are loads of benefits that are offered to first-time homebuyers so maybe it’s time to prepone your home buying plan. Let’s hit it!

  • Deduction on Home Loans Interest Paid – You can claim an additional tax deduction of Rs.50,000 under Section 80 EE of the Income Tax Act, 1961. This deduction is over and above the current limit of Rs.2,00,000 which is availed under Section 24. But hold your jumping for now. Here are the conditions under which this benefit can be availed:
    • The additional deduction is applicable only on the interest portion of the loan which is taken for a self-occupied property.
    • The benefit is applicable only for first-time home buyers. And we’re all working here under this assumption.
    • The value of the house is not more than Rs.50,00,000 and the loan taken is not more than Rs.35,00,000. Benefits are meant for people who need it, right!
    • The Home Loan should’ve been sanctioned between April 2016 and 31st March 2017.

Do you fulfill these criteria? Okay, you can jump now!

  • Tax Benefits in absence of HRA – Even if you’re not getting any HRA from your employer, fret not. Here comes Section 80GG under which you can avail of some tax benefits as well. This provides for deduction of any expenditure incurred by an individual, in excess of 10% of their total income for rent payment, for a furnished/unfurnished accommodation if they are not granted HRA by their employer or are self-employed. But hold on, conditions ahead. The excess expenditure must not exceed Rs.2,000 per month or 25% of their total income for the year, whichever is less.
  • Pradhan Mantri Awas Yojana – I know you were waiting for this. Here it is. The PMAY scheme is for home buyers from the Economically Weaker Sections (EWS), Lower Income Group (LIG), and Middle-Income Group (MIG). If you are from one of these sections, GoI is here for you. You can claim tax subsidy (not benefits) on Home Loans. Here are the parameters to decide how much subsidy you can get:

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And how do you define income groups?

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Your home loan will be processed in 2 steps:

  1. You receive the approval of your home loan.
  2. You sign the loan agreement papers and complete other necessary documentation. The loan amount is thereafter paid directly to the builder by Home First Finance Company.

Loan decisions are made in less than a week. You will receive an SMS on your registered mobile number as soon as we make a decision.

HomeFirst does not charge any prepayment fees. This applies to both partial and full repayments. In fact, we have a special Auto-Prepay feature to facilitate this process for you.

HomeFirst offers loan tenures between 1 year to 25 years. If you opt for a longer tenure, you can get the advantage of a lower EMI each month.

HomeFirst can provide finance up to 90% of the property value. The balance has to be arranged by you from other sources. Please note: 90% financing is only available for loans amounting to less than Rs. 30 lakhs.

All co-owners of the property have to be co-applicants to the loan. A person who is not a co-owner can also become a co-applicant to the loan.

During the construction phase, HomeFirst will disburse funds to the builder on your behalf. These will be based on payment requests made by the builder as per the construction schedule.

HomeFirst will charge interest only on the amount disbursed as loan during the construction phase. In this period, interest is charged only on the disbursed loan amount. For example, if you have a sanctioned loan of Rs 10 lakhs, but the property is under construction and we have disbursed only Rs 4 lakhs, you will be charged interest only on 4 lakhs. These interest payments are referred to as pre-EMI interest payments.

EMI payments will start only after completion of the project and registration of the property.

All cheques to HomeFirst should be written out in favor of ‘Home First Finance Company India Limited’.

In the event of an unfortunate incident, home loan insurance will help you or your family pay off the home loan. This ensures that the burden does not suddenly fall upon family members at a bad time.

You can send us an email at biz@homefirstindia.com

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