If you want to buy a home, it is better to take a mortgage loan. A home mortgage will give you the satisfaction of spending your life in a place, according to your own standard and lifestyle. Apart from this, there are several home loan benefits.
What a home loan is
A home loan or a mortgage loan is the amount you borrow from a lender to buy your dream home. You need to make monthly payments to the lender for a specific period of time till the loan is fully paid off. You have to keep your home as collateral and in case, you fail to make payments, your home can be taken away by the lender. As the loan is a secured one the interest rate is also lower. However, the loan repayment amount will depend on some factors like, your credit score, loan term, loan amount, down payment percentage, etc.
Benefits of mortgage loan
There are certain home loan benefits which are mentioned as follows:
Instant cash: As you are taking loan to buy the home, you do not have to spend the money you have saved throughout your life time and can keep that for any emergency situation.
Use it in regular expense: If you are senior citizen and have applied for a reverse mortgage, with the monthly payment you will receive from the lender, you can even meet with your daily expenses.
Tax benefits: Home mortgages help you in saving tax. You will get tax deduction on the amount you will pay towards your loan repayment.
Wide loan variety: You can choose a loan type according to your repayment affordability. There are different ways by which you can repay the loan. You can specify your own loan term and choose the interest rate, it can be a fixed rate or an adjustable one or a hybrid also.
Improved credit score: Having mixed types of credit accounts for 10% of your credit score. If you have several types of credits like, credit cards, home mortgage, consumer loans, etc and can manage multiple tradelines, it will have a positive effect on your credit report and your credit score will be higher.
Prior to selecting a lender you should verify about his reliability and authenticity. You should also have a detailed knowledge on the loan types and select the type that will suit your pocket the best.