Home loans have made it easier and more convenient to purchase, perhaps the most valuable asset of your life - your home. With a home loan, you can have a roof over your head, not having eroded your capital savings and long-term investments. However, no matter which lender you opt for, you need to pay up a part of the total cost of the house in order to be eligible for a home loan.
This down-payment also helps you keep your home loan EMIs in check, and strategize possibly the biggest investment of your life. Here are few of the methods that can help you plan your down-payment in advance, before applying for a home loan:
Start saving early in order to build yourself a corpus
One of the easier ways to accumulate funds for home loan down payment is being the early bird when it comes to savings. Initially, you can start investing in instruments that offer high returns such as equity (in keeping with your risk-appetite) and gradually transfer the gains into safer financial instruments such as recurring deposits, fixed deposits, etc.
Set up a goal and plan your monthly budget
Sticking to a monthly budget is necessary to create a corpus for the down payment of your home loan. You need to set up a financial goal and plan your budget accordingly in order to achieve that goal within a particular period of time. Assessing your monthly expenditure, consciously cutting down on impulsive purchases and introducing savings as an essential habit right from the very onset can put you on the route to financial prudence.
Ask for the ‘Proportionate Release’ facility
Select banks allow this facility wherein you would be able to make the down payment in small installments (for an under-construction project) rather than an upfront lump sum payment. The idea behind this is that since a project might take years to be completed, you could make use of periodical down payments in the interim period. And the bank would accordingly disburse you the loan amount, in proportion to the down payments made.
Mortgage few investments
You can also arrange finances by liquidating or mortgaging certain assets and investments such as an old car, mutual funds, shares, stocks, precious ornaments, life insurance policies etc.
In case you’ve exhausted all your resources and still fall short of the required sum, you can borrow funds from your friends and relatives and repay them once you return to the pink of your financial health. With diligent planning and smart savings, you can fulfil your long-fetched dream of owning a house, without letting down payment become a concern.
To know more, click here.
This content has been created in association with YONO SBI.