Home loans have made it easier to purchase your dream home, the most valuable asset of your life. You can have a roof over your head without eroding your long-term investments and capital savings, through home loans.
While the major amount of the total cost of your house will be covered under the home loan, you will have to pay a part of the total cost known as the down payment to be eligible for a home loan. They also keep the EMIs of the home loan in check.
Here are a few tips about how you can develop strategies perhaps the most significant investment of your life:
Start saving early
One of the easiest ways to accumulate funds is to start saving when it comes to home loan down payment. Keeping with you risk appetite, and you can invest in equities initially or any other avenues of a higher return. Transfer the gains into safer channels such as fixed deposits, recurring deposits, etc.
Plan your goal and plan your monthly budget
Sticking to your monthly budget is the key to saving for your home loan down payment. For that, you need to set up your financial goal, and then you will have to plan your monthly budget accordingly. Assess your monthly expenditure critically, start cutting down on impulsive purchases and implement savings not as a need but as a habit.
Opt for ‘Proportionate Release’
Several banks offer proportionate release, where you can pay your down payment in installments for an under-construction project rather than full payment. The under-construction projects take years to complete, and the idea is to utilize this time to make periodical down payments in the interim period.
Mortgage other investments
The least preferred option, you can arrange finances by mortgaging or liquidating the other assets such as shares, mutual funds, insurance policies, gold, and other precious ornaments, etc.
If still, you are short of the required sum, borrow it from friends and repay them accordingly. Dreams don’t come true until you make them. In the case of your dream house, smart savings and diligent planning are crucial to success.