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HOW TO ARRANGE THE DOWN PAYMENT FOR YOUR HOME LOAN?

Posted on Monday June 15th, 2020

Buying a home is a biggest investment that involves several factors that can impact your life. One of the major factors which one needs to decide is how you are going to finance your dream home. Whether you want to use your savings or want to Avail a Home Loan. Home loans help you to purchase your dream home without any hassle. However it is the most convenient way to finance your purchase but still you need to pay some amount from your pocket as a down payment to secure a loan. The portion of fund generally varies from 10 to 30% with most of the lenders. Here, we guide you about how to arrange the down payment for your home loan and what are the benefits of it.

Benefits of higher down payment
• Lower rate of interest
• Unburdened principal amount
• Lower processing costs
• Larger home equity
• Reduces the debt burden

When you are in early years of age, you may find yourself in difficult situation when it comes to down payment as your saving are in small figures. Nowadays, the price of real estate are rising day by day and arranging 20-30% of total cost of home is difficult for many of us. But if you wait to save more, it is possible that property prices may also increase, so it is always better not to delay when you have zero in some suitable property. If you are planning to Apply For Home Loan you may need to set aside some short term money goals and need to work on money management skills to arrange for the down payment. There are certain ways to arrange lakhs of money through which it can be made easier to fund your down payment.

Few ways to arrange money for down payment
• Start savings in your early years.
• You can borrow against your insurance policies such as term insurance or PPF.
• You can use money from your investments like FDs.
• You can also opt for a personal loan of a small amount.

Well, every lender either banks or NBFCs ask for a particular proportion from the total market value of your home as the down payment. The down payment ranges from minimum to maximum and varies from 10 to 30%. There are both merits and demerits related to it but the thing you should keep in mind that you should make a down payment as per your affordability. If you are availing an online home loan, never rush to pay higher down payment by liquidating your savings or investments as this can back fire you and you can be trapped in debt resulting in financial crisis and fewer returns in the future from policies and investments. In case you are unable to arrange required percentage of down payment then you can negotiate with the lender and ask him to reduce the payment portion percentage to avoid the burden of loan and making your loan journey easy on your pocket.


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THE ASPECTS YOU NEED TO LOOK OUT BEFORE YOU COMMIT TO A HOME LOAN

Posted on Friday May 22nd, 2020

A home is one of the most important assets of your financial security. Once you have your own home, then there’s nothing that can threaten your financial future. Buying a home is the biggest investment of someone’s life, so you need to keep all your short and long term goals in your mind before planning for it. A right purchase and best home loan should be in your priority list. Being aware of these two aspects can help you to avoid any debt trap in the future. Always look for the loan offers that suit you the best as your requirements and preferences are going to vary from others. Now you have better idea of the aspects you need to look out before you commit to a home loan, it’s time to tell you more about your rights as a borrower.

When you apply for a loan: When someone applies for a home loan, the lending institution is supposed to provide you all the information regarding:
• Applicable interest rates.
• Payable processing fees.
• Prepayment charges.
• Charges for converting interest rate types(either floating or fixed).
• Miscellaneous charges that might affect the interest rate on loan money.

When loan gets sanctioned: After your Home Loan Application gets sanctioned, you have the right to ask the lender about following things:
• Terms and conditions of loan agreement.
• Sanction letter.
• Written receipt for all post-dated cheques.

During tenure period: In case you forgot or unable to make the repayments for any reason, there is a set procedure which may not cause a mental stress to you and lender has to follow for the recovery of outstanding balance that are given below :
• Reminder to the borrower through notice
• Notice prior initiating any recovery proceedings against you
• Sending an authorized professional who shall deal with the borrower in civilized manner
• Contact the borrower to maintain the desired decorum and decency.

After repayment: Once you are done repaying the whole loan amount along with interest rate, you need to ask the lender for following documents:
• No due certificate.
• Original documents of titles of property pledged as collateral for home loan.
• Unused post-dated cheques.
• Letter of final settlement signed by authorized official of the lending institution.

When you Apply For Home Loan read the fine print carefully so that you won’t miss out minor details that could possible affect your finances in the future. You are supposed to know all the exact details of your loan and documents related to it. No doubt, there is a long list of things that you have to remember but keeping your rights in your mind will help you to stay calm headed in the loan journey as sometimes you are unable to get the assistance from your family and friends. You have to be sure about everything from your eligibility criteria and rights to the property you are buying. We hope you are more aware now about the rights you have while applying for a home loan to make your purchase a best decision of your life.