But, the big question for many buyers would be to arrange the 20% of down payment which they have to pay today. How can you manage "present" down payment that for a home bought for "future" with price based upon your future income growth?
TIPS FOR ARRANGING THE MONEY
- SAVE, SAVE and SAVE : Save and invest towards the goal when it is atleast two years away. Traditional saving instruments may not grow the money faster, you should look at non-traditional ways like high growth mutual funds or share trading. It may be risky. Some builders like CMRS Group offers you investment option in property to invest with minimal guaranteed returns of 60% in two years. These can grow your money faster and get your prepared for down payment.
- LIQUIDATE WHAT YOU HAVE : You should look at monetising your liquid assets like fixed deposits or other short-term investments like mutual funds and stocks first before touching your long term investments like real estate and gold. You should try to get maximum funds out of liquidating investments but always remember to keep some savings for contingencies.
- BORROW WHEN YOU CAN : You should borrow against your property, life insurance policies, jewellery, fixed deposits, mutual funds, stocks or even your retirement-oriented investments including public provident fund (PPF) and employees' provident fund (EPF). Partial withdrawal can also be considered in case of EPF. The best option could be borrowing against your life insurance policy, because you can benefit in terms of lower interest rate and an easy repayment schedule.
- LOAN FROM HIDDEN SOURCES : You can take money from friends and family for short term, though it could be small but would be very helpful as it generally does not carry any interest. Also, many employers offer soft loans (salary advance) to their employees. It comes at very low cost with respect to other loans due to zero or reduced rate of interest.
- TOP UP OR OVERDRAFT : Many banks offer over draft facility to salary account and Some banks offer soft loans or top-up loans to bridge the gap and reduce the margin money requirement. However, these top-up arrangements come at much higher interest rates and borrowers should be careful while going in for them.