Many people dream of buying a home. But they do not cancel the plan because they cannot afford a house.
Rather they do not have the money to pay down payment. As soon as the home loan application is approved by the bank, the next step is to pay the down payment. For this, you have to take steps before buying a house. Start saving as much as you can to make a down payment of a home loan. Make a little guess and arrange the funds accordingly.
Banks will only give you 80-85 percent of the market value of the property as a home loan. The rest 15-20 percent will have to be arranged as soon as the bank starts processing the application. To avoid delay, it is necessary to arrange cash for immediate use as soon as the loan is approved. All banks ask for a down payment and this is kept as a guarantee. If the customer is unable to make a down payment after the loan approval, the bank has the right to cancel the home loan. It is important to know about the concept of down payment. We are going to tell you ways to save some money for down payment.
Think ahead and budget
If you are thinking of buying a house in the next 1-2 years, then this is the time for planning and budgeting. Save for your home loan down payment by saving a little bit from your monthly income. While planning and budgeting, also take care of inflation and loan value appreciation. Do not spend money in unnecessary things. Spend only where necessary so that you can save more and more money. Even if you find the amount small, but it will help you when you need it.
Use existing things
Home loans can sell gold, bonds and expensive metals to raise money for down payment. If the price of your proposed house is expected to increase in future then these things can be sold. But keep some money with you for essential things in emergency and home construction.
If you have a property that can be sold and given a home loan down payment, then do so. In such a situation, work can be done from second hand carriage or empty plot. Assets that are not giving you much return can be used in home loan down payment. Any property that gives less revenue or returns should always be preferred for investment in the house.
Loan against life insurance policy
Loans that are available in lieu of life insurance policy, their interest rate is very low and there are many options to repay the loan. If the value of your life insurance is high then expect to get more loan amount. This loan can be repaid during the term of the insurance policy, so you have time to deal with difficult financial situations.
Loan against savings
Ending savings is not always a wise decision. This is the time when you can consider a loan in lieu of savings. Withdrawal of Savings often incurs pre-maturity charges and also affects the returns you get in future. Therefore, taking loans on these is a good way to fund. Just keep in mind that the amount of such loan will be 50-70 percent of the value of savings. But there will be a very low interest amount, which is economical.
Apart from this, one option is to take a soft loan from the company. This can be considered as an option to add to your savings list while paying down payment. The interest rate of such loan is very low or zero. But this will reduce your monthly income because the EMI of the loan will go from your salary every month.
It is the responsibility of the customer to thoroughly check the property documents and to arrange the down payment amount. If there are legal issues in the property then the bank cannot be held guilty. So use these tips to arrange a down payment at the right time.