What comes in your mind when someone says ‘home’? I bet it brings peace, comfort, joy and family in your mind. Home is not only a place where you can be yourself but it also gives you a sense of security. However, having a home is still a dream for many people. Real estate prices are soaring high these days. This makes it hard for people to fulfill their wish of buying a house. Thanks to the home loan service that various bank provides, becoming a homeowner needn’t be hard on your pocket. Buying a home is one of the biggest financial decisions you may take in your lifetime. If you are considering applying for a home loan, it can become an even bigger decision. There are numerous benefits of availing a home loan and here is the list of few of them.
Low Interest Rates
In Nepal, home loan is one of the loan service that provides the customer low interest rate. Lower interest rates result in lower EMI amounts which makes it more attractive and affordable. A Home loan comes with a lower interest rate than other forms of borrowing like a personal loan or a gold loan. This makes it easier for an average middle-class salaried person affording to buy a home of their own. It is also easier to get a home loan because it is secured against an asset.
As banks provides strict due diligence before providing the loan, it ensures that the property you invest in is free of any legal issues. The bank verifies the project-related documents, its title and legal clearances before approving a loan on it. It also does a full background check of the credibility of the builder as well as the property itself. Thus, you can be sure that the property you wish you buy is safe.
Since real estate business is growing in tremendous rate, buying a house can be one of the best investment today. The capital appreciation of the real estate properties has been much higher than the interest you pay on the home loan. This will help you gain profit on the sale of the property as well.
Improves Credit Score
After your home loan is approved if you pay your EMIs (equated monthly installment) on time, this helps to improve your credit score and credit-worthiness. The bank will classify you as a safe and responsible borrower. This helps you to improve your loan eligibility. You can use this to your advantage and avail other loans like car loan at a more affordable interest rate.
A Way of Saving
You might be surprised by a fact that a home loan can help you save your money. If you have some cash in your hand, you may have the temptation to spend it. But if you are confident that you will have a steady stream of income then you can pay your EMI on time. You can look at it as a saving rather than an expenditure. After you repay the loan completely, you will become the owner of the house, which will have an increased value at the end of the loan tenure.
No Lock-in of Funds
Even if you have enough money, it is advisable that you get a home loan. Buying a house is not like buying a cup of coffee. While you invest all your money in a lovely house, other emergency can pop-up anytime. In the time like that your money can be locked up in the real-estate and it is difficult to liquidate cash on short notice. Thus, if you get a home loan, you can diversify your investments.
There are various advantages of getting a home loan. However, this does not mean there are no risks in it. You must assess and review all aspects of your finances and then decide whether you can afford to take a loan or not. You should think about your future flow of income, whether you have enough savings to meet any emergency expense.
Now that we have discussed the advantages of getting a home loan, it’s time for us to wrap up this blog. We hope you found this piece useful and informative. If you are about to sell, buy, or rent any real estate materials, you can always visit basobaas.com.