Tips to Buy Dream House

Tips to Buy Dream House Without Making a Down Payment From Your Pocket

Applying for a home loan can often make all the difference between independence and dependence. A self-owned house provides more flexibility and peace of mind than living in a rented apartment. Besides enabling you to construct or purchase your own property, a home loan offers many exciting features like low-interest rates, extended repayment tenure, minimal documentation, flexible eligibility, and excellent tax benefits.

However, when you apply for a home or housing loan, the lender asks you to make a down payment of at least 10% of your home loan amount. But, there is an option through which borrowers can avail of a housing loan without paying a single penny from their pocket. Let’s discuss some effective tips to buy dream House!

Top 4 Tips to Buy Dream House

1. Take The Help of a Personal Loan

If you want to avoid shelling out the down payment amount from your pocket, try choosing a lender offering pre-approved or pre-sanctioned housing loans. Getting a pre-approved loan is always beneficial because knowing the loan amount in advance can help you to stay better prepared. 

A pre-approved or pre-sanctioned loan informs you of the loan amount you are eligible to receive from the lender. Once you have the pre-approval letter with you, apply for an unsecured loan like a business or personal loan and use the amount to make the down payment of your housing loan. 

Although the interest rate of unsecured loans is higher than home loans, you can get sufficient money to make the down payment of your home loan. For example, if your home loan amount is INR 50 lakh, you must make a down payment of INR 5 lakh. You can apply for a personal loan worth INR 5 lakh to make the down payment and pay in easy installments.  Prepare all the documents required for home loan before applying for a pre-approved home loan.

2. Seek Out Extra Funds For Buying Furniture

Depending on your property’s market value, your debt-to-income ratio, and the status of the documents required for a home loan, you can ask for extra funds from your lender. Lenders usually approve extra money for buying fixtures and furniture. However, you can also use the fund to make the down payment. 

So, considering the previous example, you may ask your lender to provide you with INR 5 lakh for fixtures and furniture. The interest rate of the extra fund will be similar to the interest rate you are already paying for your home loan. 

3. Apply For a Loan With Your Employer

Another wise way to arrange the money needed to get the down payment is by applying for a general-purpose loan at your organization. Usually, employers provide such loans to loyal employees at ultra-low interest rates. Also, the documents you need to submit to get such loans are typically fewer than those required for a home loan.  So, if your organization or employer offers a low-interest loan facility, utilize it to get the down payment amount on easy terms. 

4. Loan Against FD or Securities 

If none of the abovementioned options work for you, you may apply for a loan against a fixed deposit or a loan against securities. Alternatively, you may apply for a loan if you own life insurance policies.  In these loans, the lender accepts the physical copy of your investment or life insurance papers as collateral and disburses funds according to your eligibility. The interest rate of such loans is usually lesser than unsecured loans. 

So, a loan against FD, securities, or life insurance policies might be a viable alternative to costly unsecured loan options. You can use the funds thus obtained to make the down payment of your housing loan.  

Conclusion

The tips to buy dream house mentioned in this article can help you conveniently arrange the down payment of your housing loan. Sensible and intelligent borrowers increase the down payment to reduce their loan liability. A home loan runs for nearly thirty (30) years, so you must plan professionally to avoid entering a debt trap. The best lender offers easy terms and complete transparency to let you construct or purchase your dream house seamlessly. 

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