6 tips to manage home down payment in IndiaSeptember 6, 2019 . Home Buyer's Education Series . 10 min read
Your down payment is the first step towards your new home. On average, a home down payment is anywhere between 5% to 20% of the value of the property to be purchased with the rest of the money based on housing loans. It is important to plan ahead to make your down payment.
We look at 6 ways to manage your down payments and live life at the same time. Don’t let life come to stand still for the sake of property investment.
Set a budget and time period
This is where research comes into play. Look at the locality you want to buy your house in and determine the property rate. Then map out how much you’ll need for your home down payment. Divide that number by the time you’ll need to save up. You will be able to create a realistic budget to help you graduate from a person who rents a home to a homeowner.
Get a separate savings account
Keeping the money aside will prevent you from tapping into it. It is now possible to put a transfer monthly directly from your checking account without missing any month. Forgetting to keep aside money will not be a problem and saving will be a breeze for you. When it comes to Non- Banking Financial Corporations, SIPs and mutual funds are also great options to invest in, in order to save up for your future down payment.
Manage monthly expenses through further research
You may have phone bills, health insurance, car loans or EMIs on your list of payments every month. These will continue to dig deep into your pocket. Looking around for better deals, reduced rates and prices will help manage your down payment. As borrowing rates decrease there will be a difference in EMI rates across banking institutions will also fall. Keep a keen eye on the changing nature of banking institutions.
Keep a tab on your spending
Online transactions have made spending so much easier. With wallets, UPI and online banking driving the present towards a cashless society, it is also difficult to keep a check on spending. Use these tools to keep a check on your expenses. Keep checking your account to highlight those areas where most of your money is spent. Set a budget aside. Limit nice meals to a minimum number of times in a month or take fewer vacations. It may seem a task at first, but this mindfulness will turn into a habit and you will be able to continue such habits for the future with your housing loan as well. This is practice before the EMIs roll in.
Home buying schemes in India
Different states have different schemes for houses and homes for first-time home buyers and investors. For example, the affordable housing scheme is a recent proposal that makes buying and investing in property easier for people in lower-income brackets and mid-income brackets. Their goal is to make homes more affordable for the masses and bridge the demand-supply gap in the real estate world in India.
When you save an amount of money, reward yourself
- Let’s say your down payment is about ₹1 lakh. Every time you save an amount of ₹25,000, treat yourself to a small lunch or dinner to make saving a milestone to accomplish. So every time you save an amount that gets you closer to your down payment, take a small break. Soon saving will not be as bad as it sounds. It will also make you work hard towards promotions and better opportunities in your career.
- Look at arranging for your down payment as a financial goal. This will be a great milestone towards starting a life based on savings and working toward your new home. Present generations find it hard to buy homes especially in the recent markets and prefer to rent out rooms and adjust in co-living spaces.
- The high price, however, is not the sole reason for the ignorance in housing. Credit cards and wallets allow present generations to swipe first and then pay later. With the bills mounting up, home buying is not a reality to many of them. Home buying includes the ability to provide a sum of money before all the home loans come into play. This will make the whole home buying process a little less stressful.
With all that being said, buying a home is now more convenient than it was five years. HomeCapital can assist you with an interest-free down payment scheme to make your home buying process a pleasant one!
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