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How to Raise Funds For Home Down Payment?

4 Things to Know Before You Consider Home LoanWith a wide range of banks offering loans to the people to purchase a home, owning a home was never this easy. However, one has to meet the eligibility requirements of the specific bank to get the loan approved to purchase a home. Most of the first home buyers are under the misconception that the banks will sanction the loan for the 100% of the property value. In reality, banks are authorised to sanction 70% to 85% of the loan amount for the property value. The rest of the amount should be adjusted by you towards the purchase of the home and it is termed as down payment. Continue to read the article to know different ways to arrange funds for down payment when you take a home loan.

Different Ways to Raise Funds for Home Loan down Payment

Plan savings

When you have thoughts to purchase a home in near future with the help of the home loan, you have to plan your saving systemically to arrange funds for down payment of the home loan. You can start building funds for your down payment with the help of the recurring deposits; mutual funds apart from following the strategy save first and spend next.

Limited borrowing

You can raise funds for down payment of the housing loan by taking another loan if think that you are missing out a good deal due to the lack of the funds for margin amount. Make sure you exercise this option with due care. The EMI you pay for this loan will be an addition to the home loan EMI you pay every month. Ensure your income is capable of addressing multiple EMI without any financial burden. Many lenders insist on a clearing of the existing debts before you take a home loan. Alternatives for arranging the down payment include borrowing from friends and relatives or take a loan against your PPF or LIC or fixed deposits.

 Pledge existing property

 Not everybody will be capable of serving EMIs of two loans in parallel. If you are one among them, pledge your existing property fund money for down payment. You can also get money against shares gold, jewelry or loan against rent to arrange funds.

Defer payment to builder

There is no need for you to compromise on the dreams of owning a home because you cannot arrange funds for down payment. Instead, you can ask the builder to defer down payment where you can pay part of the down payment to the lender now and the later will be paid at agreed interval.

Liquidate assets and investments

Another option to arrange for margin amount of home loan is liquidated part of your property, bank deposits, redeem your securities, gold or anything in your portfolio to the extent that it does not affect your financial goals


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