Purchasing home is one of the biggest challenges in life. Of course, arranging the down payment for the same is the biggest expense too. Many registered banks in India are providing loans to the deserving candidates who wanted to take the loan. This facility is accompanied by your ability to make down payment for the purchase of the house. Every borrower of the home loan needs to pay a certain percentage of the house value as upfront token amount before purchasing the home. As the banks sanction 80% of house value for the loan amount, 20% of the value should be arranged as down payment. The current article helps with the factors you should look in while arranging the down payment for your home.
Planning and budgeting
As you are looking to arrange a good deal of money in the form of down payment to purchase your house, you need to have a strong discipline and dedication to arrange the same. You need to plan it well in advance to arrange these funds without hurting your budget. If you are planning to purchase a house after 3 years and planning to arrange the sum of 10 lakhs for the same, you can think of saving the amount through some fixed deposits and recurring deposits and mutual funds if you are risk averse. At the same time, if you are a risk taker, you can invest in some equity funds which will give you good returns over the period of three years if you plan it right. At times, you can get more than what you expect to save through another form of savings.
Borrowing from family friends
Borrowing from friends and family is another good option to consider when there is a shortfall between the amount you have and amount you pay for the down payment of the home loan. Before considering this option, you should make sure you have a repayment plan in place for the same. This option should be considered only to fill the little gap in the down payment of the home loan because once you avail the home loan you will have to bear the both home loan repayment as well as repayment to the friends and relatives.
Don’t over leverage
It is good to hear that government is offering 80% of the loan to your home loan. You should leverage your financial capacity before you avail the loan. You should make sure that you are comfortable with EMI of the home loan. Make sure the home loan EMI does not become a reason for financial distress.
Never ignore stamp duty and other registration charges
Over the cost of the house and down payment, the buyer of the house has to bear with the stamp duty and registration charges as well. This constitutes a substantial amount of the house value in most of the countries of India. Home loans do not cover these costs. You should make sure you arrange funds registration along with the down payment.