Buying a home is a big decision and requires a huge capital. How can a buyer, who does not have sufficient liquid money, arrange for the down payment to buy a house? So, here in this article we will look at some of the options one can consider to manage for the down payment.
As these last two years of coronavirus pandemic has made people to get caged in their respective houses. So, people who are living on rent started to consider the home purchase to get rid of those monthly rentals.
Not only this, but also in a post-COVID-19 world, remote working would become common in our professional lives, while being at home and maintaining distances would be a crucial part of our physical survival. Many organisations have introduced permanent work from home culture that made people to realise the value of having own roof own head.
Now in this scenario, the property ownership would become even more important, as owning a property gives one a sense of security. The loan you get for a property can only be availed to a maximum extent of 80% and rest 20% of the property amount has to be managed by the buyer itself.
Though at the current times, the Interest rates are at a record low – you can get loans at 6.64% (starting) interest at present. And, as preferred by the buyers there are many ready to move projects options as well and that are being offered at unbeatable prices. The developers are giving away benefits to buyers, in the form of waivers and instant discounts.
But, now come the main question that how to arrange funds for the down payment for a house?
Take A Loan From Family Members
Down payment is a major thing that needs to be considered before buying a property, thus you can at the first step check if your parents or spouse can help you with the down payment.
Borrow the money and then return it on the promised date. Not only would you save a great deal of time, energy and paperwork but also secure a lender, who will be more compassionate and sensitive if you are unable to repay the loan within a specified timeline, owing to some unforeseen event.
Provident Fund (PF) Account
If you have a running provident fund account, then that can be a great help and you can withdraw money for home purchase and various related purposes.
Take A Loan Against Insurance Policy
A policy holder can get between 80% and 90% of the surrender value (the value you get when you terminate the insurance plan voluntarily), of the insurance policy as loan.
Take A Personal Loan
Another way to arrange a down payment can be by taking a personal loan, only when you cannot find any other alternative. This is because personal loans are unsecured and hence, cost more than any other type of loan. You may end up paying nearly 11%-20% interest on personal loans which is a big deal.
So, whenever you invest in a property you should plan your finances and then only finalise the property.