Archive for: ‘September 2015’

How to raise a down payment for home loan in quick time?

September 22, 2015 Posted by admin

More than 80% of people face this challenge of raising the down payment money during the home buying process. This is due to the fact that even after detailed home loan planning sometimes –

  • The seller demands higher upfront payment
  • Cost of property increases
  • Property loan or house construction loan sanctioned is less than expected amount
  • Development charge on the property is more then what was initially demanded
  • Any one of the miscellaneous charges from amongst parking fees, society, light, water and electricity fees or parking charges, service tax or vat was not accurately known at first place, etc.

Hence, it is important for people to remain a little flexible during the home buying process.As far as possible,people must take help of realty experts from credible web portals like Housing.com during the home buying, selling or renting process. This will ensure that the entire transaction is smooth, easy and hassle free and will get executed within short time. On the other hand, prospective home buyers or existing customers can also refer to ‘Home loan guide’ of Housing.com to understand the following parameters associated with housing loans:

  • Interest rates
  • Eligibility criteria
  • Documentation process
  • Associated charges
  • Related terms and conditions
  • Ways to select the best lender
  • Things to be careful about during the loan application process
  • Importance of CIBIL score
  • Why and how the loans get rejected
  • Process to transfer the existing home loan to a new lender
  • Income tax benefits on home loans, etc.

Having said this here are some of the best means to raise down payment money for home loan in a quick time –

Provident fund

Anyone who has completed 5 years or more of continued service in one or across different organizations is eligible to withdraw provident fund (PF) money for making the down payment. Below are some of the other features that people need to be aware of before withdrawing PF for purchase or construction of dwelling unit:

  • Application has to be made on form-31
  • Withdrawal can be done only once in the entire tenure of service
  • Property must be in the name of self or spouse or must be jointly owned
  • Property must not be a joint property owned by anyone else in the family other than spouse
  • Maximum admissible amount is 36 times of wages
  • Withdrawal request must be made through employer
  • Declaration must be made in the obtained Preformat along with signed application

Loan against LIC policy

The next quick fix to counter the challenging situation of raising the upfront margin money for home down payment is by taking the loan against life insurance policy. People can get the loans against these policies at negligible interest rate of 9 to 10%. This is not; the interest paid on this amount is half yearly and there is no need for a monthly EMI. If people opt to take loan against LIC policy from Life Insurance Corporation of India then the terms and conditions are even simpler as:

  • Interest paid is the simple interest
  • There is no timeline of when the repayment needs to be made
  • Even if the loan amount is not fully repaid during the course of the policy, the payout can be adjusted against advance
  • Repayment can be made either in part of full, etc.

Both these means are the excellent way to raise down payment sum in quick time without much efforts and can be an excellent help in the home buying process.