Easy ways to raise funds for your Home Loan down payment

Put your fears of home loan down payment to rest with these tips and suggestions from IDFC FIRST Bank

For many people, owning a home is a dream come true. It has become comparatively easier to arrange money to buy a house thanks to home loan plans accessible on the market. Home loan interest rates have dropped dramatically over the years. Some banks now provide rates as low as 6.5 per cent p.a. (as is also offered by IDFC FIRST Bank).

Some banks, however, may lend 80% of the property's worth. You need to come up with the remaining 20% in the form of a home loan down payment. The down payment amount changes from property to property, depending on its features. You will need to pay the deficit out of your pocket. Read on to learn about the minimum home loan down payment and how you can raise funds for it.

Minimum down payment for a home loan

Many banks will lend up to 80% of the value of the property you want to buy, as a home loan. We call this the Loan-to-Value (LTV) ratio. Only a select few banks, such as IDFC FIRST Bank, offer you 90% of the value. Your home loan down payment will depend on the amount you have been approved for or the amount of money you can afford to put down on a home.

Because most lenders would only lend up to 80% of the property's worth as a home loan, you'll almost certainly need to put down at least 20% of the purchase price as a down payment. If you already have the funds, you should be able to complete the task without difficulty. However, if you are short on finances, you will need to consider how you can raise money for your home loan down payment.

How to raise funds to pay for the home loan down payment?

Arranging funds for your home loan down payment can be quite the task. To help you, here are some tips to follow:

Taking a personal loan

If you don't have enough money to pay the balance, you can always seek a personal loan for a down payment on the house. It can help, but you can only avail of it if you meet the eligibility criteria. Taking a personal loan from a bank like IDFC FIRST Bank ensures you get a loan quickly via an instant loan app.

Pradhan Mantri Awas Yojana (PMAY)

The goal of this government-backed programme is to help people buy homes. If you are a recipient of the programme, you may be eligible for a 6.5% interest rate concession on your home loan. Your income bracket will decide the subsidy percentage. Taking advantage of the programme may alleviate financial stress when it comes to making repayments. It will also enable you to put together finances for a home loan down payment. Check your eligibility and apply for the loan to take advantage of lower interest rates on your home loan.

Using your investments as collateral

A strong investment portfolio can benefit you in many ways. Investing carefully will not only help you safeguard your future, it will also help you get through difficult financial times. You can, for example, use your fixed deposits or mutual funds as collateral to get a low-interest loan. You'll be able to organise your money in such a way that you'll be able to make the home loan down payment.

Furthermore, the stress of repaying the loan will be reduced because secured loans have lower interest rates than unsecured loans. This works out well if you are taking a home loan from IDFC FIRST Bank, where you get up to 90% of the value of your home. You can also keep track of your investments and loans using our mobile banking app.

Turning to family and friends

You may consider this as a last resort, but when you think about it, it's not such a bad alternative. The best part is that you do not need to pay any interest on the amount. You also won't have to worry about late penalty fees if you're late with your payments.

While getting a home loan has become very easy, arranging for your home loan down payment may be a bit of a task. Thus, it is always better to plan and be prepared if you are in the market for a house.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.