How To Arrange Down-Payment For Your Dream Home
While buying a house of one's own is still a dream for many, finances remain a serious concern for many homeseekers. While banks finance 80 per cent of the property value, the remaining amount has to be arranged by the buyer. MakaanIQ takes you through possible options for funding down-payment in the easiest way.
If you are planning to fund your down payment through mutual funds or stock investment, you need to start really early. It takes time to form a huge corpus which can be good enough for paying the upfront amount at the time of home purchase. This also depends on the pertaining market conditions and the kind of scheme you have invested in. Though it is not advisable to go for high risk schemes but these are the ones which can offer you higher returns in a short time. The best way is to hire an investment advisor and hand over your portfolio along with your monthly budget to him. You can educate yourself about the processes of the market if you want to handle your money by yourself.
Loans from relatives/friends
Though loaning from your relatives and friends involves risk of a sour relationship but you can choose to pay them back with apt interest rates that might keep the relations intact. You might also choose to apply for personal loan but with double-digit interest rates and rising pressure of EMIs on your pocket, there would be more liabilities at the end of the month than what you have planned for. Also, at any time, the interest to be paid for personal loan would be more than what you would be paying to your friend/relative.
Now you can use your provident fund for financing your dream home. EPFO has allowed contributory employees of the provident fund (PF) scheme to use 90 percent of their PF accumulations to make down payments to buy houses and use their accounts for paying EMIs of home loans. However, there are few rules to be followed by a PF member to withdraw the amount to buy a real estate property. One of them is that he or she has to be a member of a registered housing society having at least 10 members. Apart from this, the EPFO directly pays the amount to the co-operative society or the builder, promoter, state government or central government. Therefore, you cannot make a property purchase in resale. You can also pay your EMIs with your provident fund amount.