There is a lot of work involved when it comes to buying a house. First you need to shortlist the property, hunt for loans and stand long to the procedure of home buying process. One thing that bothers the most when it comes to buying a house is the down payment. Down payment is the most important part, while you are making a buying decision for your house.
When you start house hunting, you will come across many offers made by the developer and the banks like 5% down payment only, pay only 1% and get 99% loan on the property, etc. SBI home loans provide maximum eligibility for your home loans. What they do not mention on their advertisement is that the loan approvals are subject to your bank statement and your financial capability. Sometimes the offers mentioned above are on the property value not on the total value of the flat or property which includes government charges, stamp duty and registration.
Now imagine, you are in the process of buying a house and come across an advertisement which mentions 99% funding on the total value of the property. You visit the site and like the property location and so and book the property by paying 1% of the price. The developer seeks your documents required, and starts the loan procedure. After a couple of days you receive a call from the bank saying we cannot process your loan because of low salary and you cannot opt for a 99% loan. The maximum eligibility is 80% of the total value of the property. Now you are in a fix on what to do and start finding options to fill the 20% gap on your house price.
You speak to the developer for more time and the developer gives you a suggestion to take a personal loan towards your account and make the 20% down payment. Is taking a personal loan a right decision considering a home loan is on the horizon.
Today we will explain you if taking a personal loan for making down payment for your house a right choice.
Mostly taking a loan for making the down payment is never a great option. If you are short with funds, try seeking help from your family and friends before considering personal loan as an option. A personal loan is also a debt and is one type of unsecured loan which can be hard to handle sometimes. If you are taking loans for down payment understand that you will repay this loan as well. This means you will have two EMIs to pay. You may have pre-approved loan offers towards your account which may give a personal loan without cibil check.
Before thinking of taking a home loan, it is always suggested to clear of your existing debts and make room for more salary to be credited in your account. This practice can help you get maximum home loan eligibility. For example, if you take a personal loan worth 5 lakh rupees the EMI will be around 15,000 rupees with tenure of 5 years to pay back. On the other hand towards 15,000 rupees you are eligible for 15 Lakh rupees home loan with tenure of 15 years. This way you can maximize your chances of eligibility during availing a home loan.
There are other options in the market apart from taking a personal loan. There are various mortgage loans, piggy bank loans, retirement funds loan on your parents, etc. The best option in this situation is to opt for down payment assistance program, this is usually given by the developer considering your financial statement and post dated cheques.
Buying a house comes with lots of challenges and if you are ready to dive into this unknown pool, better have a life jacket handy to get out safe without damaging your financial reputation.
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