Are you purchasing a home for the first time and are a first-time home purchaser? You can land the home of your dreams with the right home loan plan and benefits. First-time home purchasers are often eligible for exclusive benefits like lower minimum down payments, special grants, and help to pay closing prices sponsored by the governments at the state and central levels.
Numerous levels offer first-time home purchasers incentives and special loans. Many programs help first-time home purchasers in a few instances. However, before opting for a home purchaser program, as a home buyer, you should compare the home loan interest rate and use a home loan EMI calculator to check equated monthly installment affordability and whether your monthly income will support the EMIs.
First-Time Homebuyer Programs and Benefits to Make Homeownership More Attainable
There are multiple ways through which the Indian Government has helped citizens purchase their dream homes and make homeownership more attainable. A few ways are as follows:-
Pradhan Mantri Awas Yojna (PMAY)
According to the PMAY scheme, an interest subsidy varies from 3% to 6.5% given to people under the yearly income bracket of Rs. 18 lakh upon purchasing their first residential property. The most intriguing fact is that for Economically Weaker Sections and Low-Income Groups, having a female borrower as a co-applicant is mandatory to take advantage of the subsidy privileges. Female borrowers are eligible for benefits on stamp duties. The subsidy amount is adjusted from the home loan overdue when the regulatory body approves the same.
Let’s understand it using an example:
Suppose you opt for a loan worth nine lakhs Indian rupees with a home loan interest rate of 10%, and you come under the Economically Weaker Section category. In that case, you can get an interest subsidy at a 6.5 home loan interest rate for a loan of around six lakhs Indian rupees. The same shall be Rs. 2.67 lakhs. The subsidy amount would then be decreased from your overdue loan amount on the approval date.
Sections 80C and 24
If you are a first-time homeowner, paying a home loan interest rate for a loan. You can also avail of yearly interest deductions of around two lakh Indian rupees. It is only valid under Section 24 if the home is owned instead of rented. Under Section 80C, you can reclaim tax benefits of around Rs.1.5 lakhs on a home loan principal repayment. Utilize a home loan EMI calculator to know how much you will repay and whether you can repay the loan. It is available for homes completed and owned for approximately five years from the acquisition date.
The 2016 Real Estate Regulation Act or RERA
The 2016 Real Estate Regulation Act, or RERA, benefits home purchasers in various ways, such as opening data on various construction projects, standard measurements for residential property like carpet area, purchaser rights defined and developed, insolvency limitations, etc. It audits the malpractices of various builders and controls the real estate sector to increase purchasers’ stakes.
Housing Subsidy GST
If you acquired your residential property under the Pradhan Mantri Awas Yojana (PMAY) scheme, a GST of 12% was imposed. It decreased to 8% in 2018, meaning that a first-time home loan borrower with an average income of Rs.18 lakhs can be eligible for a bonus of approximately Rs.2.7 lakhs instead of the initial Rs.2.5 lakhs while purchasing an apartment or a home.
Subsidy Income Slabs
Two surplus income brackets are implemented for first-time home purchasers under the Pradhan Mantri Awas Yojana (PMAY) scheme. Purchasers with a yearly income of approximately Rs.12 lakhs can qualify for a subsidy of 4% of Nine lakhs Indian rupees principal repayment. The other subsidy income slab is a subsidy of 3% on a principal amount of Rs.12 lakhs for individuals under the yearly income bracket of Rs. 18 lakh. It is necessary to use a home loan EMI calculator and know the affordability of the home loan repayment amount.
A first-time home purchase is a massive hurdle for everyone. The Government of India has introduced several programs for first-time home purchasers. First-time home purchasers are mostly in the business because of underwriting mortgages, so qualified borrowers get a loan with an affordable home loan interest rate to purchase a home with a smaller down payment, an average credit score, and a decent monthly income. Additionally, as a borrower, you should use a home loan EMI calculator to ascertain whether your decent monthly income will let you pay your monthly home loan equated monthly installments. Simply put, the tool will let you check the affordability of monthly EMIs.