Wednesday, January 27, 2021
No menu items!
Home Internet Tips for Home Loan - How to Get a Home Loan

Tips for Home Loan – How to Get a Home Loan

Buying a house is an important decision that involves several factors that can impact your life. The first thing which you need to decide is how you are going to finance the purchase of your dream home. Whether you want to use your savings or you want to take a home loan. Well, the first option is limited only to a few as most of us don’t have much savings in our 30’s and 40’s which can buy us a home.

Home loans are way convenient and help you to purchase your dream home without any hassle. Though it is the most convenient way to finance your home purchase, still you need to pay some from your pocket even after availing the loan. This is the down payment for your home.

Funding Your Home Purchase

Make sure that you avoid liquidating your long-term investments in haste and at sub-optimal prices, so as to fund your home purchase. If you do so, you will be putting your financial future in jeopardy.

In fact, you can opt for a home loan. This way, you are not only able to buy a home early in life but it also leverages your future incomes. Hence, one of the optimal solutions of funding a home purchase would be by availing a home loan and repaying the amount according to the schedule set by your lender.

Down Payment Challenges

When availing a home loan, you need to personally fund a portion of the cost of the home, which is generally a minimum of 10% and varies from 10 to 30% with most of the lenders. This portion that you need to fund from your own pocket as the bank doesn’t provide the entire funding for your house. Hence, making a down payment is essential to be eligible for a home loan.

ALSO READ  Palco MP3 – For PC window 10,8,7

Benefits of making a higher down payment

you may get a lower interest rate

Reduces your principal amount

lower processing costs and insurance premiums

You get a larger home equity

Reduces your debt burden

After you decide to take a home loan, you may find yourself in a slightly difficult situation when it comes to the down payment. The price of the property is reaching the sky and arranging 20% to 30% of the total cost of it from your own is difficult for many of us. And if you decide to wait for some time so that you can save for the down payment, it is possible that the property price may increase again. So, it’s always better not to delay once you have made your mind.

ALSO READ  How to Protect your IP address 192.168.l.254 from getting exposed?

To arrange for the downpayment you may need to set aside a few of your short term money goals and need to work on your money management skills more effectively. Although it seems tough to arrange lakhs of money still there are certain ways through which it can be made easier to fund your down payment.

Ways to arrange money for your home loan down payment

Use money from your savings

Seek proportionate release payments

You can borrow against your insurance policies including PPF and term insurance.

Borrowing from friends and family is also an option

Use money from your investments such as FDs

You can also take a personal loan of a small amount

Things to take care off while planning a higher down payment

Lower liquidity

Financial crunch during an emergency

ALSO READ  How to Convert MP3 File to Other Formats Online

Less returns

possible shortfall in funds for initial expenses such as home interiors

Go for a Loan against Your Life Insurance Policies or Provident Fund

Since your home is nothing but a long-term asset that appreciates in value over time, you might as well consider utilizing your long-term savings (in case you don’t have any other option).

By taking a loan against your life insurance policies or provident fund, you will be able to repay this loan amount over the time with your savings.

How much down payment is ideal to make?

Well, banks ask for a particular portion from the total cost of your house as the down payment. Still ranging from minimum to maximum it varies from 10 to 30% of the property cost. However, there are both pros and cons related to it. But the fact of the matter is you should make a down payment as per your affordability. Don’t rush to pay a high down payment by liquidating your investments and savings as this can backfire and you can face financial crunches in an emergency and fewer returns in the future. In case you are not able to arrange funds, you can bargain with your lender and ask him to reduce the down payment percentage. An ideal amount can also be set by the help of a home loan EMI calculator. The home loan EMI calculator is an easy virtual tool and can be found on the website of any financial firm.

ALSO READ  Guide to single mothers to procure a home loan

Pros and Cons of Large Down Payment


Since you own larger equity in the property, it thus lowers your dependence on the borrowed funds.

ALSO READ  Top 6 Amazing Apps to hack an iPhone in 2020

Seeking a low loan amount means you will pay a low-interest rate. For instance, the interest rate for Rs.20 lakh loan amount is comparatively lower than that for Rs.30 lakh loan amount. However, this depends on your lender’s policies.

With a lower loan amount, the chances of your loan application getting approved are high.

All this eventually leads to cost savings, as the processing fees and home loan insurance premiums depend on your loan amount.


Chances are that your own funds might get locked up for the long term. This may result in lower liquidity for you and would, in turn, lead to a financial crunch during an emergency.

Home loan repayments provide you with tax benefits, both on the principal as well as interest component. Having to pay a lower loan would mean lower tax benefits.

To Conclude

A home loan is essential while buying your dream home. Choose a Home Loan which have no hidden charges and is designed to meet your specific requirements.

Latest News

Top 25 Websites to create Avatar Cartoons Online in 2021

In the current five years, things have changed a lot. Privacy risks have increased these days, and people are...

Top 10 best Apps Like Omegle for you in 2021

What Websites Are Related to Omegle? At the moment, social media apps like Instagram and Snapchat are all the rage....

Top 10 Best Windows 10 Themes and Skins Packs in 2021

If we talk about the unique desktop operating system ever, without any doubt, best windows 10 themes will be...

Top 8 Best Xbox One Emulators for Windows PC in 2021

The best xbox emulator will assist you in smoothly running best xbox emulator  games directly on your Windows PC...

Top 15 Best Free MKV Players For Windows 10 in 2021

If we're talking about media consumption, Windows 10 has a media player for Windows. The Windows Native Media Player...

Watch Series Alternatives and List of Unblocked Watch Series Proxy Mirrors sites 2021

Watch Series is popular name when it comes to downloading torrent files.You can download torrent files of latest movies,...

Best Putlocker Alternatives to Watch Movies Online 2021

Putlocker is very popular website that enables users to stream television shows, movies and many more anywhere without problems. The...

Top 50 Anime Torrents Sites For Download and Watch Free Movies 2021

Words anime– pronounced “ah-knee-may”– is an abbreviation of the word animation. In Japan, the word is used to refer...