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Money Matters, Buying a Home, How do you manage high Down Payment?

Buying a home for living would often require you to stretch more than what you can afford in terms of total cost of ownership. Since its for your own living, you would like it to be at best location, with best of amenities and of bigger size. All this adds up and shoots up the total price. But you decide that it is worth the HIGH PRICE, as your income would grow over time and you would feel good about the wise investment at the right time. 

 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
  1. 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.
  2. 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. 
  3. 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.
  4. 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.
  5. 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.
Overall, it is not difficult to arrange for 20% of down payment to buy your dream home. You should plan and execute all these five steps to get the maximum money to be benefitted with additional discounts from the builder. Also, as payment of EMIs could reduce your take-home salary, be prepared to cut down your life style for few years. Reducing unnecessary expenses could give you more savings than expected to meet your financial needs comfortably even after paying EMIs for home loan.

For any property guidance, free legal advice and any other assistance while buying a property, feel free to call at  +91-7676-122-000 or send an mail to info@cmrsproperties.com
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