Planning to Buy a Home? Here are the Essential Tips to Collect Down Payment

Planning to buy a residential property sometime soon? If yes, then this blog post is a must-read as here we have listed the tips to collect funds for a down payment before buying an immovable asset in India. It is essential to keep funds handy as a huge amount of money is involved in the entire process of homebuying. So, get your doubts cleared about how to gather a down payment for home purchase by going through this blog.

Figure Out the Budget

Every person has an insight into his/her financial condition and thus the homebuyers are required to have a specific budget. So, you are suggested to consolidate unit value for which you can easily pay the EMIs. Hence, the first step to collect funds for the down payment of home purchase is to figure the property that suits your budget as the Indian real estate market offers a huge choice of immovable assets when it comes to buying a property.

Ask for Proportionate Release Option

Home buying in India includes the financial creditors mainly as a large number of prospects opt for a home loan. Thus, many financial institutions lend the down payment amount in instalments to the loan borrower. However, the lender disburses the complete home loan amount to the developer once the buyer repays the entire down payment amount to him/her.

Remember this option is not available with all banks or the financial creditors as the policy to have a tie-up with the developers varies from bank to bank.

Short-Term Loan

This type of loan can be availed for a short period of 1 year or 24 months. The experts feel that a homebuyer must utilize this option to gather the down payment amount as selling of an old property to buy a new one is not a wise decision. So, take your papers to the bank and check if things can fall into place.

Loan against Policies

Realization of the down payment amount is the first move towards being a homeowner and thus gathering this initial amount is a big task. But, liquidation of investments such as loans against policies and loan against mutual funds is an easy down payment collection option. This tip to collate down payment for home purchase works as an instant solution when it comes to making a real estate transaction deal in the Indian property market.

Withdrawal of EPF

The 90% withdrawal of EPF i.e. the Employment Provident Fund helps you realize the dream of being a property owner. This investment lets you save a portion of monthly salary that can be disbursed at the time urgent need. For example, withdrawal of EPF to deposit down payment for a home purchase.

Mortgage Loan

Selling an old property to buy a new one is not a smart decision as owning a property is different from inheriting a one. So, you are suggested to take mortgage loan as the banks keep the property documents and disburse the required loan amount on a predetermined interest rate on loan.

The homebuyers are also suggested to keep the debt ratio and expenses low, as maximum savings only come to the rescue after availing a home loan. So, think twice before carrying out a monetary transaction as gathering funds for a down payment is not an easy task.