Posts Tagged ‘Tips’
Difficulties’ pertaining with property loan is easily solved by the available option of Home loan. Borrowing a home loan helps the individual to reduce the burden from his head; it is also true that borrowing should be done with proper and right source. If you are failed to track the correct source and are not aware of the fiscal and taxation consequences in getting property loan it can soak your life and peace of your mind at every single point of time. Here are some guidelines for acquiring, taxation policy and repaying your home loan.
ยท Means, Mediums and borrowing capacity of an individual?
Banks, private money lenders, financial institutions, friends and relatives and also many others are the available means, or sources for grasping the loan, in this Banks plays major role in providing a Property loan. Banks have their own criteria for calculating the capacity of an individuals borrowing. Banks judge your borrowing capacity from the chart of the total income expenditure done by you in the given period of time. It depends upon the monthly income and expenses flow from your income. Bankers assume around 40% of monthly income can be utilized for paying into the monthly installment. Like, if your monthly income is about 50000, then the maximum installment amount can reach around 20000. Further, calculation for the final loan amount is also calculated on the period of loan & rate of interest associated. For eg, rate of interest at 9.5%, along with tenure of 20 years then loan of approx 22 lakhs can be availed. Here, your Liabilities are also taken into account by the banks. Henceforth it is recommended that overall expenses should not exceed 55 – 60% of your total monthly earnings to acquire a residential or commercial property loan.
To acquire property loan age factor is also considered by bankers. If an individual is 53 years of age then there are chances of not getting loan through banks whereas on other side if an individual is at 30 years of age then he can easily quote and receive the applied loan. Here age factor is considered by banks so that there should not be any existence of default payment of installments or loss to banks. As the age of 60 is the age where an individuals get retired from his service and the person with 30 years is still young at his age to easily repay his EMI and outstanding as compared to person of 53years of age.
Monthly CTC salary is also indeed important factor. Allowances and special allowances are not taken into account while lending the money. This includes commission, incentives, monthly bonus all this may reduce your eligilbity for loan to acquire since it is not fixed regular income. Home loan is also favorable for the person who is opting loan for renting the house. Individuals, who has availed the loan and given his flat on rent, can apply for the deductions without harming their HRA’s received in their gross salary under sec 24(b).
- Joint, family, friends and Relatives loan
If an individual is running with short of funds or reserve to acquire a property and banks reduces his borrowing eligilbity he can go for a co-borrower. Banks generally accepts a co – borrower and provides loan. Some lenders are not very much OK with co – borrower as your spouse, since they think that, there can be any time disputes between the both. So the idea of making your life partner as co – borrower is a good option.
Loan managed from friends, relatives or any other financial sources also enjoys the tax benefits. This comes into effect only if the loan so acquired is for building a property, to buy property, other repairs and renovations accomplished with the property. But, claim and deductions for the loan availed from other financial institutions is not considered under sec 80C. Taxation is liable only in ready constructed properties. However, no tax deduction is followed if the loan is availed to buy an open plot of land.
- Taxation Benefits on Property Loan
Under section 80C deductions upto1 lakh can be claimed if an individual repay housing loan. This is very much beneficiary to the person who actually pays the huge amount of installments. Not only this, deductions under sec 24(b) of 1.5 lakhs a year can also be claimed apart, from the taxable earnings of the borrower.
Tax deductions can be claimed individual if there are co – borrowers for the home loan. Individuals are eligible for the benefits as per the ratio of contribution to acquire and ownership of so called property. For instance if wife pays 30% of overall amount from her source then she is liable for the deductions as per her contributed ratio. Thus, if in a current year, principal is repaid of 1 lakh, she can claim the deductions of 30,000 following her husband to 70,000.
- Early Repayment of loan
A controversy always clashes in minds of the borrowers whether it’s good to repay the loan amount early before the tenure period? Here I would suggest YES, because it is good to repay the loan as early as possible rather then waiting for the tenure period to get end. In current if you are paying higher rate of interest you are indirectly loosing your money and filling the pockets of the lenders. As, in practical terms if you keep waiting your tenure period to get end you are actually paying 3- 4 times of your actual borrowed principal amount from the lenders. For instance if you have borrowed a loan of 20 lakhs in this year of 2011 for 20 years and at the end of the term period which would end in 2031 you would be paying to lenders around 70 lakhs, which is actually a huge loss. Therefore, it is recommended if you have the funds available then pay the loan amount soon as possible. Repaying is easy, banks charges a reasonable fee of around 1 – 2.5% for the outstanding loan amount however, some banks also show helping hands by not charging even a penny.
The concept of Taxation should also to keep in mind if you plan to sell out your property. As short term capital gain comes into picture if you sell out the property with in the 3 years of purchasing the property. Therefore the good idea is to invest at least 60% of money into real estate properties which will help you in deductions OR even not paying the property tax.
Is there really a need to hire a financial adviser? What does an adviser do? Is it worthy to get an adviser? These are some questions an investor might have in mind.
Most of these investors often face the challenge of not being able to handle their very own investments. This may be brought about by lack of patience, understanding or even the self-discipline to administer their financial portfolio.
Given these issues faced by a typical investor, thus a need to hire an adviser arises.
Selecting the right financial adviser is very critical, and may be expensive. Hiring one means that the investor will be delegating management of his financial goals to another person, who most of the time may be a complete stranger to him.
Arriving at the right decision on who to hire is a truly complicated process. A lot it is at stake, therefore, choosing the right one is a must.
Here are 10 tips to help you find and hire the right financial adviser for you:
Tip #1: Research for People who fit your needs
Knowledge is power. Identify your current status, needs and opportunities you want to explore. This way, you will be able to streamline candidates, and ensure that the financial adviser you are considering will be aligned with your needs.
Tip #2: Educational Background
Education is important. Check if the the person you are considering is a Certified Financial Planner or a Resident Financial Adviser.
Tip #3: Know how long the person has been in the industry
You can research or ask the person directly to know how much experience he has in financial management. It is evident for any investor to know if he is entrusting his money to a well-experienced adviser.
Tip #4: Credibility Check (referrals; affiliations)
It is imperative for an investor to know the financial capabilities of a prospective adviser. Know his affiliations and past clients.
Tip #5: Know if the person has been reprimanded for disciplinary actions by a professional or regulatory board.
An investor logically wants to work with someone who has a clean record. Check his background and make sure that he is worth working with.
Tip #6: Ask how much is the fee
Know if you can afford your prospective financial adviser. He may be excellent at what he does, but make sure to ask yourself if hiring a financial adviser is realistic for your current financial standing. Weigh your needs and your capability to pay him.
Tip #7: Know how many clients the adviser currently works with
If you will be hiring an adviser, you would want that person to focus on your needs, and be able to address your financial goals. Know how many clients the adviser is currently working with. Make sure that if you are going to hire him, he can promise to deliver your expectations and manage your financial portfolio very well.
Tip #8: Ensure frequency of meeting with the adviser
It is important for you to be transparent with the adviser and clarify the frequency of your meetings. Regular meetings will be a venue for you to update each other, strengthen your working relationship and review financial matters.
Tip #9: Make sure all transactions and communication are well documented
Things that are not written are forgotten. Financial management is a very important matter. You would want to ensure that everything is well documented. This will protect both of you from any miscommunication that might happen.
Tip #10: Trust your instincts!
You have to trust your instincts. If you are uncomfortable with the person, don’t push yourself to work with him. Trust your instinct. Working with a financial adviser doesn’t only require money and knowledge. Trust is also a vital part for a successful working relationship and achieving your financial goals.
There are many ways to save money with your home insurance and it is worth exploring every option out there. Home insurance is a good place to look for savings because you’re most likely required by your mortgage lender to carry homeowners insurance on your house and home insurance costs can vary widely.
The single best way to save money with home insurance is to shop around. Take the time to compare home insurance quotes because rates between each company offering home insurance can differ by hundreds of dollars. Take the time to get at least three quotes, and because home insurance comes in many flavors make certain you comparing apples-to-apples with the different policies.
Here are five additional tips for saving money with your home insurance.
1. Did you know most insurance providers offer home insurance discounts for policy holders who are 55 or older and retired? This discount can save you significant money on your home insurance, possibly up to 25 percent. If you fit the bill be sure to get in contact with your home insurance provider to see if you qualify. Senior home insurance discounts differ depending on your state, your home insurance provider, your age and the type of the insured home.
2. Did you know your credit rating can affect your home insurance rate? It can be depending on the rules in your state, so work toward maintaining a clean credit rating. Also check with your home insurance provider to find out just how much your credit score factors into your home insurance rate.
3. Bundling your home insurance with your auto insurance or other types of insurance will almost always provide a discount on your entire insurance package. Even if you find home insurance from a different provider than your auto insurance that is less expensive than a bundled package, make sure you look into the extra benefits you may be offered when buying home insurance and auto insurance from the same insurance provider. Very often you will be offered more than a simple discount when buying all your insurance from one provider.
4. Getting a home security system can provide home insurance savings. The amount of savings will differ among different home insurance providers, but often you can save up to 15 percent on your home insurance by installing a home security system. Other safety devices that can offer home insurance savings include smoke detectors, fire alarms, dead bolts and fire extinguishers.
5. Does your roof need replacing? Even if doesn’t it might be worth it to replace your roof for home insurance savings. Depending on your state and your insurance provider, installing a higher-quality roof can reduce your home insurance.
There are many ways to save money with your auto insurance and it is worth exploring every option out there. Auto insurance is a good place to look for savings because almost every state requires car owners to carry at least a minimum level of auto insurance for each vehicle they own. Auto insurance is required by law so you should take the time to compare auto insurance rates and find the best possible policy for your car insurance needs.
The single best way to save money with auto insurance is to shop around. Compare auto insurance quotes – this advice might sound simple, but it is the simplest way to find the best possible auto insurance rate. Get at least three auto insurance quotes to compare and make certain you are comparing similar policies.
Here are five additional tips for saving money with your auto insurance.
1. Having a good driving record can save you considerable amounts of money with your auto insurance. Almost all auto insurance providers offer safe driver discounts, and often the longer your driving record remains clean the higher discount offered on your car insurance. In addition you can take defensive driving – as long as it’s not because of a ticket – and receive additional safe driving auto insurance discounts.
2. Did you know your credit rating can affect your auto insurance rate? It can be depending on the rules in your state, so work toward maintaining a clean credit rating. Also check with your auto insurance provider to find out just how much your credit score factors into your car insurance rate.
3. Bundling your auto insurance with your home insurance or other types of insurance will almost always provide a discount on your entire insurance package. Even if you find auto insurance from a different provider than your home insurance that is less expensive than a bundled package, make sure you look into the extra benefits you may be offered when buying auto insurance and home insurance from the same insurance provider. Very often you will be offered more than a simple discount when buying all your insurance from one provider.
4. What is your occupation? Did you know if you are employed in certain occupations, such as engineers, educators or scientists, you may be eligible for an auto insurance discount. Check with your car insurance provider to find out if you quality for an occupational discount.
5. If you don’t drive very much, shop around for an insurance provider that offers low-mileage discount programs.