Quick Tips To Use Your Provident Fund To Finance A House
Most people who are salaried have PF accounts which are usually known as Provident Fund that is deducted every month and gets deposited into their PF accounts.
But do you know that you can finance a house or construct it using your PF account? Yes, this is true and you can withdraw money from your PF account with some conditions and buy or build your dream house.
There is an eligibility criterion to use your PF account to finance a house which is described now:
1. You Should Have Served For 5 Years: You can take benefits of this scheme if you have worked for more than 5 years and the age of your PF account should be the same, meaning it should have completed 5 years too. If you are eligible then you can withdraw money and finance your house easily.
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The amount you can withdraw for the land is limited to 24 months basic salary and dearness allowance (DA). However, if you want to buy or construct a house, then the permissible limit is 36 months of your basic salary and DA.
2. Only Owner Or His Wife Can Withdraw: The property must be under your name or your wife’s name or jointly by both then you are eligible to withdraw the amount from the PF account. Neither your parents nor your sibling is eligible for the same.
You will need to submit the papers of the property registration where the property owner’s name should be mentioned. If not, then you cannot avail the facility of this scheme.
3. Property Should Be Free From Legal Issues: If you are dealing with any legal property issues then you cannot withdraw the money from your PF account.
Always make sure that all the details will be verified first and if you follow all the conditions then you can take benefits of such a scheme.
4. Property Registration is Mandatory: If you want to avail the benefits of this scheme, then you need to make sure that your property should be registered in the first place.
If it is not registered then you will not be able to withdraw money from your own PF account. So, you need to ensure that the property you are buying should be registered because while withdrawing the amount from your PF account, you will need to submit the proof of registration of your property and then you would be able to enjoy the benefits of such a scheme.
5. Repay the Existing Home Loan: You can withdraw money from your PF account to repay your existing home loan. There are some conditions to avail of this facility:
a. You should be working for at least 10 years.
b. Property name should be under your name or your spouse name or joint by both.
c. You can take advantage of this scheme once in your lifetime.
d. The withdrawing amount will be 36 times your monthly wages.
Conclusion
Always remember the above points before withdrawing amounts from the Provident Fund for your personal needs such as buying a house etc. You should consider all the points before getting into this else you may suffer due to incomplete knowledge of it.
There are numerous benefits for the people who are salaried having active PF accounts such as tax benefits, getting a lifelong pension, insurance benefits, higher returns and many more. So, don’t forget to take advantage of such a great scheme as this will help you in fulfilling your needs.
