There are a few more options too that you could look at. For instance, you can obtain a loan against the surrender value of your life insurance policy from the insurance company or from a bank or obtain a loan from your provident fund account if you have had an employee provident fund account for more than 5 years.
Banks generally fund only 85% of the cost of the property and the rest will have to be paid as down payment. This amount has to be kept aside by you from your savings. If you are unable to ramp up the down payment and are in shortage of funds, you could opt for a personal loan as well, with your home loan but you will be eligible for this only if your income can support it. Also the interest rates are pretty high and could be a strain on your monthly budget.
Ensure that you have other regular sources where you can pool this money on a regular basis else its best to plan ahead and save money by investing them in suitable financial instruments that provides good returns.
You can plan your investments in such a manner, that will enable you to access the funds at the right time to procure your home loan. Even otherwise you can utilise some of these investments like shares, securities, fixed deposits, insurance policies to pledge them as additional security for the 15% margin expected to be paid as down payment.
There are a few more options too that you could look at. For instance, you can obtain a loan against the surrender value of your life insurance policy from the insurance company or from a bank or obtain a loan from your provident fund account if you have had an employee provident fund account for more than 5 years.
Some home finance companies have tie-ups with reputed construction houses to enable fully furnished, ready to be occupied apartments to be sold to the home loan borrower, which will not usually come under the cost of the property. Here the home finance company would make a provision for a higher loan amount to include this cost, which also takes your income into consideration. This also saves you expenditure that occurs when you move in for the first time.
If you are planning to apply for a home loan, do take into account all of these options to help you choose the best way to make your down payment.
Good article, but how about the 'Flexi Finance Account' option that is available from HSBC Bank?
Please advise.