Essential tips for first-time homebuyers: Securing your first home loan

In the ever-changing real estate market, the decision between renting and owning remains a hotly debated topic for first-time homebuyers. As property values continue to climb, buying a home often requires housing finance due to its high cost. Despite the commitment of home loan EMIs and financial responsibilities, many prioritise homeownership for its stability and long-term financial benefits. This highlights the importance of informed decision-making and strategic planning when venturing into the real estate market as a first-time buyer.

Why should you opt for a Home Loan?

Choosing a home loan provides the advantage of immediate asset ownership, overcoming initial affordability challenges. Structured EMIs enable more manageable repayments, fostering disciplined fund allocation for loan settlement. Without this financial arrangement, accumulating sufficient funds for a home purchase can feel overwhelming. Below are key tips for individuals purchasing their first home:

Strategic Financial Investment

Committing to a home loan EMI is a smart financial move for your future. Unlike renting, where payments only benefit landlords, home loan EMIs build equity in homeownership. Each payment increases your ownership stake, leading to complete ownership. This investment is a valuable asset, offering long-term financial security.

Facilitating Wealth Creation

Purchasing a home with a home loan EMI supports the creation of wealth. Property values generally appreciate, boosting your net worth. Additionally, you can leverage your property for loans, enhancing financial stability and opening avenues for education, business, or emergencies.

Ensuring Stability and Security

Opting for a home loan EMI offers stability and financial security. Unlike rentals, which can be unstable, homeownership allows roots to be established in the community. You can personalise your living space, fostering a sense of security and belonging.

Leveraging Tax Benefits

Paying a home loan EMI offers valuable tax benefits for homeowners. According to Section 24(b) of the Income Tax Act, deductions can be claimed on the interest

component of your home loan. Additionally, Section 80C allows deductions on the principal repayment amount, reducing your overall tax liability. These tax benefits substantially decrease the cost of homeownership, making it a financially wise decision. When considering a home purchase, factor in these tax advantages to maximise savings and affordability.

Maximising Long-Term Cost Savings

While the upfront costs of homeownership can be intimidating, paying a home loan EMI leads to substantial long-term savings compared to renting. Rental prices typically rise over time, but with fixed mortgage payments, you benefit from stable payments that help mitigate the impact of inflation. Once the loan is paid off, monthly payments cease, resulting in significant savings over the property's lifespan.

Assessing Financial Readiness

Deciding between renting and owning hinges on your current financial status. If buying a home is your goal, carefully evaluate the associated costs. You can use the Bajaj Finserv Home Loan EMI Calculator before applying to make an informed decision about affordability and long-term financial benefits. This proactive step ensures you are ready for the responsibilities of homeownership.

When considering a housing loan, ensure you have a stable job and income that comfortably cover EMI payments. Choosing to rent could be a more suitable option if your financial circumstances are uncertain. However, if you are ready to buy and need financing, consider a home loan from Bajaj Housing Finance, a wholly-owned subsidiary of Bajaj Finance. Their competitive interest rates, flexible repayment options, and straightforward application process make owning a home achievable and hassle-free. Explore Bajaj Housing Finance Home Loan to turn your homeownership dream into reality with confidence.