ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Five advantages of taking a home loan for rent payers

Updated on January 8, 2011
Taking a home loan for purchase of property
Taking a home loan for purchase of property

There are millions of people around the world who are homeless, some have their own house they inherited or have bought in cash, and some are regular rent payers. Today I am writing this article for those rent payers, who are searching for taking a home loan and save their money spent on paying high rents. The rent they pay can be used in buying their first property by the way of taking a home loan or mortgage loan. Now there are various advantages of taking a home loan for buying a property and they are:

  1. You save on monthly rent. By paying monthly installments on your property rentals, you were only draining away all the money. Now that money is being utilized in buying a home.
  2. The interest you pay for loan could be claimed as a deduction from the income from HP, the house you own has zero income and suppose you have paid some 20000 as interest, that interest you can claim as deduction, so you save tax on Rs 20000 by claiming deduction. According to the current income tax slab on home loans, government allows up to 150000/- in interest and principal that you can claim.
  3. If you pay the home loan installments monthly in approximately 15 years to 20 years, you will have your own house. If you are able to pay part-payments or prepay all home loan, you can have your own house early than that.
  4. The appreciation in the value of the property in 15 years is yours. For example, the house you bought with home loan is 10 lakhs. Down payment required is 1 lakhs generally. Loan taken on 9 lakhs for 15 years and the installment is generally 12000 per month. Your rent paid is Rs. 5000 per month, so net effective increase in payment is just Rs. 7000 every month so after 15 years, the house is yours. The tension of increase in rent every year is gone away.
  5. The appreciation in value of the property value is yours. The value of the house may be 60 lakhs after 15 years.

So above were a few advantages of taking a home loan for rent payers. There are many other advantages of home loan that I will share in my upcoming articles. Regarding risks, there is no risk in buying a home if you buy it from a genuine person and take home loan from a well established bank, either nationalized or international. By taking a home loan, the only risk is you should be able to pay the installment timely every month for maintaining good credit score. Besides this, there is no other risk as such.

Comments

    0 of 8192 characters used
    Post Comment

    • Simone Smith profile image

      Simone Haruko Smith 

      7 years ago from San Francisco

      As a renter, I appreciate your outlining the benefits of owning a home! If I think that I shall be settling down somewhere for the long run, I'll definitely consider buying!

    • Purple Perl profile image

      Purple Perl 

      7 years ago from Bangalore,India

      Soni, useful hub for all wanting to create an asset.

    • LillyGrillzit profile image

      Lori J Latimer 

      7 years ago from The River Valley, Arkansas

      Soni, you are definitely a person with a gift for seeing the financial good in programs, investments, and everyday life. I applaud you, and all I can say is, I wish you the every best; you have the hard work and motivation. You will be very successful, and I am happy for you!

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)