Is there a tax benefit on fees for switching loans?

I have taken a housing loan from a bank. Because of rising interest rates, I want to switch to a bank that charges lower interest. Please let me know whether I will get any deduction on any fees I pay for the switch.
Experts at Astute Consulting note that the deduction for interest on borrowed capital under Section 24(b) is available only for specified purposes, that is, for capital borrowed for construction, purchases, repairs, and renewal of house property. It is not available for any other purposes. As such, a deduction for switchover fees is not allowed under Section 24(b) of the Income Tax Act.
I receive a monthly annuity from the Life Insurance Corporation of India, through a pension policy. I am not employed. Is this income eligible for the standard deduction on income tax?
Unfortunately, no—the income is not eligible for the standard income tax deduction. Advisors at Astute Consulting note that the benefit of standard deduction has long been withdrawn, and no standard deduction is now permissible.
My employer pays me a salary, and also a business development incentive. For tax purposes, is the business development incentive treated as salary, or as business in come? Kindly advise.
The term “income from salaries” covers all the remuneration received under the contract of employment. According to advisors at Astute Consulting, the important aspect is the employer-employee relationship. In your case, as you receive the incentive from your employer, it will be treated as salary income, and not as business income.
I have served the United Nations for over 15 years, and recently retired. I will be receiving a monthly pension, according to UN policy. Will I have to pay tax on the pension?
Advisors at Astute Consulting note that, according to the provisions of the UN (Privileges and immunities) Act, salaries and emoluments that the United Nations pays to its officials are exempt from tax. Further, according to Circular no. 293, dated February 10, 1981, any pension paid by the UN to its erstwhile employees is exempt from income tax, regardless of where it accrues, arises, or is received. So you need not worry about paying tax on your pension.

What is an Interest Only Mortgage

An interest only mortgage has scheduled monthly mortgage payments consisting of interest only. Generally, the length of the interest mortgage payments last for a period of 5 to 10 years. If you pay only interest during this period your proceeding balance will remain unchanged. However, you may choose to pay more than the minimum interest payment every month.

An interest-only home loan represents a higher risk for lenders; hence, your mortgage loan will have a somewhat higher interest rate. If you expect a substantial increase in income in the forthcoming years the interest only mortgage loan gives you leverage financially. The excess savings from a lower interest only monthly payment can be used for various purposes, ranging from investment into the stock market, to home renovations, among other uses.

Interest-Only Mortgage Loans Benefits

• Lower monthly payments during the interest-only payment period
• If you have irregular income, like bonuses, commissions, etc.; an interest-only mortgage gives you the flexibility to have increased cash flow to meet your other financial goals
• Increase your cash flow, take the extra cash and invest the rest
• Real estate investors can leverage the savings and invest in other properties

An interest-only mortgage gives you the option of leveraging your dollars by taking advantage of more affordable mortgage options. More new homebuyers are able to enter the housing market by using low interest-only mortgage payments. Also, if you are a current homeowner looking to upgrade you can leverage the interest-only mortgage loan into a more expensive home that otherwise would be unaffordable.

What are Hybrid Loans

I have got this question about the Hybrid loans from a lot of people. So this gave me an opportunity to give my thinking on this here.

A hybrid mortgage loan has combined features of fixed rate mortgage and adjustable rate mortgages. A hybrid loan is also known as a fixed-period ARM. A hybrid loan initially begins with a fixed period of a fixed interest rate (typically 3, 5, 7 or 10 years). The hybrid mortgage then converts to an adjustable-rate mortgage. It is a wonderful combination of the best features of a fixed rate and adjustable rate mortgage. This combination gives you an initial interest rate during the fixed period of the loan that is lower than a traditional fixed rate mortgage.

Generally, a shorter fixed period for the hybrid loan means a lower initial fixed interest rate. Most homebuyers prefer the 10-year fixed hybrid home loan even though savings might be larger in the short-run with an initial 3-year or 5-year fixed rate term.

Many studies have shown that most people refinance or sell their houses within 5 to 7 years. Therefore, it makes sense for many homebuyers to opt for a 10-year fixed after which they can refinance or sell their homes thus, never experiencing adjustable rate mortgage payments.

It is of critical importance that you become aware that many hybrid loans contain prepayment penalties. In many cases the prepayment penalty is applicable for the first three years of the loan. Hence, if you sold your home within the three years of your loan origination you would be liable for paying the prepayment penalty. It would be feasible to seek alternative mortgage loan options if you are considering selling your home in three years.

There are several varieties of hybrid mortgage loans:

• Fixed Period ARMs
• Two-Step Mortgage
• Convertible ARMs
• Graduated Payment Mortgages (GPMs)

So before you decide that a hybrid mortgage loan would make sense for you, take time to find out about any fees, potential penalties, and terms of the loan. Make sure you get a free mortgage rate quote from an expert Mortgage Consultant in your area and arrange for a complementary consultation to see if a hybrid loan is best suited for your needs.