How Can You Arrange The Down Payment for a House?


People who often think of buying a household their thoughts to themselves due to high property prices. Some people think that buying a house might be easier by taking a home loan from the bank. However, the plan does not work because the bank only pays up to 80 percent of the loan amount. Rest of the amount has to be paid by the buyer. The rest of the 20 percent can be counted as the down payment. For instance, if the property is of INR 50 Lakhs, you have to pay INR 20 Lakhs on your own.

And according to the new RBI regulations, the stamp duty and registration amount of the property are not to be included in the loan amount. Including the stamp duty and the other expenses you might end up paying INR 30 lakhs for just the down payment. Still, INR 30 lakhs is not a small amount and might not be a piece of cake for everyone. You can still buy a house by availing a Personal Loan for home from the banks.

You can avail a Personal Loan for many things based on your credit score and banking history. There are some points that are to be kept in mind while applying for the down payment assistance loan. They are:

  1. The documents of the house: To approve the Personal Loan, the bank might ask you for the necessary documents of the property. The bank will verify the documents and if the documents are clear, the loan will be approved and sanctioned.
  2. The correct valuation of the house: After the submission of the documents, the bank will get a proper valuation of the house according to the market rate. This will be done in order to calculate the amount needed to be sanctioned for the Personal Loan for down payment.
  3. Credit Score: The credit score is one of the most basic and important things that is to be kept in mind while applying for a home loan. You need to have a good credit score to get your loan approved from the banks. If you don’t have a good credit score, the banks might not provide you the loan.
  4. The rate of interest: The rate of interest is an important factor to keep in mind while applying for a loan in a particular bank. The banks can offer different different Personal Loan interest rates. The rate of interest makes a big difference while repaying the loan to the banks. You can do a market survey for the best provider with a lower rate of interest.

You have to be very careful while applying for a Personal Loan for a home. While there are other options as well by which you can manage your down payment.

You can manage your home down payment by taking a loan from friends and family as they might not charge you interest on the amount and the period of the repayment of the loan is not set. You can repay them the loan before time and you will not be charged any pre-payment charges.

You can also manage you down payment if you have opted for Systematic Investment Plan (SIP’s). They would help you arrange your down payment amount, through the returns gained through mutual funds or purchased stocks. You can even sell the stocks and funds if the stock market is flourishing.

You can even withdraw from you fixed deposit amount or even avail a loan from any insurance policy. The disadvantage of withdrawing from a fixed deposit amount will result in charges. Whereas the insurance policies will provide the loan amount up to 85 percent.