Home loan help you to acquire your dream home. If you are considering buying a house soon or are just curious on how to plan your down payment, then this article is for you.
When you choose for housing loans, finance companies lend 80-90% of your property’s estimation and the other 10-20% also called the down payment, needs to borne by you.
When you buy a home, you need to save the whole amount including this 10-20%.
Understanding your concern, here are the ways you can accumulate the money needed for your home finance down payment:
Save for it, and it will save you:
Decreasing your current expenses like cable subscription, lunch outs, and entertainment will give you an additional stream of cash every month that you can use to save for your home.
You can also use saving methods like mutual funds, investment in gold, stocks and real estate.
Putting your money in the bank is the safest way to save for your down payment. These savings can earn you interest over time.
Banks, credit unions, and mortgage companies offer a range of savings accounts (traditional and online) that may be right for you.
Liquidation of Assets and Investments:
If you already have investments, like bonds, stocks or mutual funds that are ready to be liquidated then you can sell them off.
If you have a fixed deposit, you can withdraw the money in the form of a fixed deposit from the bank and invest it in a home.
In case you do not have any investments or a fixed deposit at hand, you can consider selling off your assets like gold, shares for home loans.
Also read: What Are The Benefits To Buy Insurance For Child?
Take help from friends and family:
If it’s a mortgage loan, you can work together with your friends and family to repay it.
Borrowing from friends and family is a good option, but you must be careful about it. It’s wise not to take loans that are poor and are more than the amount you need as you may end up paying a lot more.
Try to take loans that suits you and depending on your financial status, you can repay it as per the agreement.
Keep home-buying costs under control:
When you are buying a home, there is always a wide range of costs. With these cash-poor days, it is very important to keep the home loan affordability in check.
You should by-pass unnecessary accessories and un-necessary things.
Try to keep the number of payments in mind and don’t take on too many loans. You may end up paying a lot more than you planned for.
Bottom Line
Home Loans are meant for you to live in not to invest with. Try to be prudent while choosing the housing loan which is most appropriate and suitable for you.
The buying of the first home will be the biggest financial decision of your life and it will have a huge impact on your buying power in the long run.
So take decisions wisely and don’t over extend the loan that you get. Make use of your savings and look for an additional source as it will help you in the long run.
Also do read: Is It Safe To Buy Term Plan Online
