Tips to Arrange Down-Payment Easily for Your New Home
Nov 17, 2017 Home Trading Steps
Buying a new house hugely depends on the arrangement of finances. A part of the finance gets managed with a home loan and then remains the down payment which the buyer has to arrange. So here are some easy options through which you can arrange the amount for down payment in a smooth way.
Loan from near and dear ones: taking a loan from your friends and relatives can be a bit tricky but atleast it is better than taking some personal loan. As the EMI that you will pay will add up to your liabilities. And when you borrow money from your friends and relatives, you don’t have to worry for paying heavy double digit interest as compared to a personal loan or you can even offer them apt interest for the taken loan amount to avoid complexity in the relationship in future. Also, there might be no time boundation for paying back the money. You can pay back the loan amount as per your convenience. Hence, paying interest to your relatives and friends (which will be much lesser than the other loan interest) is much better than paying interest on the personal loan.
Provident fund: you can use your provident fund to finance your new home. As per EPFO, contributory employees of provident fund scheme can use about 90 percent of their accumulated money to make down payments for purchasing their house. You can also pay EMIs for the home loan with your provident find amount. But there are certain rules that need to follow while withdrawing the amount for a real estate matter. Such as, you have to be a member of a registered housing society that has minimum10 members. Also, the EPFO pays the amount directly to the builder or co-operative society, promoter, central or state government.
Mutual funds: Stock investment or mutual funds are a very good saving options and hence these also could be a very good funding option too for making down payment. But for that, you need to start very early to save a big amount, such that it could be good enough to fund your entire down payment amount at the time you go for purchasing the flat. However, it depends on the present market condition and the kind of stock or scheme you have invested in. So think before you invest. It is advised not to invest in high risk schemes but such schemes offer much higher returns in less time. The best way to invest in mutual funds and stocks is to hire or get some advice from an investment advisor. Tell him or her about your monthly budget and portfolio so that the advisor can guide you in a better way. You can also educate yourself through various sources about different schemes and mutual funds if you wish to handle your portfolio by yourself.
Thus, don’t worry about the down payment amount, just plan everything at a very early stage.
Loan from near and dear ones: taking a loan from your friends and relatives can be a bit tricky but atleast it is better than taking some personal loan. As the EMI that you will pay will add up to your liabilities. And when you borrow money from your friends and relatives, you don’t have to worry for paying heavy double digit interest as compared to a personal loan or you can even offer them apt interest for the taken loan amount to avoid complexity in the relationship in future. Also, there might be no time boundation for paying back the money. You can pay back the loan amount as per your convenience. Hence, paying interest to your relatives and friends (which will be much lesser than the other loan interest) is much better than paying interest on the personal loan.
Provident fund: you can use your provident fund to finance your new home. As per EPFO, contributory employees of provident fund scheme can use about 90 percent of their accumulated money to make down payments for purchasing their house. You can also pay EMIs for the home loan with your provident find amount. But there are certain rules that need to follow while withdrawing the amount for a real estate matter. Such as, you have to be a member of a registered housing society that has minimum10 members. Also, the EPFO pays the amount directly to the builder or co-operative society, promoter, central or state government.
Mutual funds: Stock investment or mutual funds are a very good saving options and hence these also could be a very good funding option too for making down payment. But for that, you need to start very early to save a big amount, such that it could be good enough to fund your entire down payment amount at the time you go for purchasing the flat. However, it depends on the present market condition and the kind of stock or scheme you have invested in. So think before you invest. It is advised not to invest in high risk schemes but such schemes offer much higher returns in less time. The best way to invest in mutual funds and stocks is to hire or get some advice from an investment advisor. Tell him or her about your monthly budget and portfolio so that the advisor can guide you in a better way. You can also educate yourself through various sources about different schemes and mutual funds if you wish to handle your portfolio by yourself.
Thus, don’t worry about the down payment amount, just plan everything at a very early stage.
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