A well-managed loan can help bring your greatest life dreams to fruition. For many young adults, the achievement and freedom of owning their own property is a major life milestone, and with a home loan, this milestone is easily within reach. 

Even if you have the funds to purchase a home without the help of a loan, it’s important to weigh up your options, first. Do you really want to exhaust your entire life savings on this purchase to avoid debt? Or would you rather take out a manageable home loan and invest your savings?

Here are some of the top home loan benefits that could help sway your decision. 

5 Undeniable Home Loan Benefits For First-Time Home Buyers

A lack of funds is not the only reason many people consider a loan for home financing. This is because certain home loans come with a plethora of financial and tax benefits, such as: 

1. Major Tax Savings 

When you take out a home loan, this offers you a great opportunity to save on taxes. This is due to the tax deductions that are applicable to homeowners under the Income Tax Act.

Homeowners are legible to deduct mortgage interest and property tax payments, and other expenses from their federal income tax. However, these deductions must be itemized.  

If you own a property and rent it out, the income you receive as rent is not taxed, either. In other words, you do not have to count the rental value of your home as taxable income. To learn more about supplementing your income even further, check out these great financing articles, here. 

2. It’s a Cost-Effective Way to Borrow Money 

It’s well-known that home loan interest rates are far lower than many other loans or forms of borrowing. This is because the loan is secured against your property, which acts as collateral. Basically, if you default on your loan payment, the bank has the security of your home to sell in order to pay back the mortgage. 

Due to this level of security, you can often find home loans that are either fixed or tracker mortgages that are just as popular. Some borrowers also offer offset mortgages, and discounts aimed at first-time home buyers. 

This is particularly true if you make a point of choosing the lender carefully – which is certainly something you should always make sure to do. If you go through the likes of Evolve Bank and Trust, for instance, you’ll know that you are going to have a particularly cost-effective means of borrowing money, so that is something that you will certainly want to think about here.

In any case, a home loan is a good way to borrow money on the whole.

3. Limits on Closing Costs 

Some home loans, such as the VA loan, place a limit on what you can be charged with it comes to closing costs on purchasing a home. This means that some of these costs and fees must be covered by the other parties involved in selling the home. Including loan-related closing costs and concessions. 

This helps to make homeownership all-the-more accessible for certain homebuyers who qualify for this type of loan. 

4. You Have a Long Repayment Window 

Many home loans have repayment periods that extend years, some reaching into decades. This takes the pressure off you and the monthly installments that you owe. The longer your home loan tenure, the less your monthly installments will be.

However, it’s important to take into consideration how much extra you can end up paying in terms of interest over an extended repayment window. Find the best repayment tenure that won’t see you paying double your original home loan amount.  

5. Enjoy the Appreciation of Your Biggest Asset 

Naturally, as with most things in life, the price of your home will increase, or appreciate, over time. If you keep your property in tip-top condition and want to sell later on down the line, you can make yourself a decent amount of profit, even if you still owe a little on your home loan! 

Looking For Relevant, and Easy-to-Understand Financial Guides? 

Ultimately, it’s worth looking into home loan benefits before you drain your life savings and rush into a major purchase. In the long run, a home loan may work out better for you and your wallet! 

If you’re in search of financial knowledge of all genres, whether it’s how to write a will, global fiscal updates, or information on auto insurance, be sure to explore the rest of this site for more.  

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