Role of down payment in your home loan.

Home is a place where you bask in the love & affection of your family. But the sense of self-accomplishment you feel to own the roof under which you create memories with your family has no comparison. To buy a home that you can call your own or any property in this era of escalating property prices is no longer a difficult task with the easy availability of an hdfc home loan. Majority of the people with basic loan eligibility and affordability can buy their own house, owing to the lowering interest rates. This easy availability and assimilating EMIs, often results in excess outflow of money in the form of interest cost.

Earlier people used to wait and save money to buy or build a house, but nowadays the working class doesn’t wait for the perfect age, they are investing money in paying the EMIs to pay the hdfc home loan for the house they own. It helps the borrowers to leverage the future income in a proper direction for lifetime investment. When you take a loan for buying your house, you have to pay certain minimum percentage of amount as margin money from your pocket to the builder, after which the remaining amount is paid by the lender. This margin money is termed as down-payment in housing loan terminologies.

The percentage varies from one lender to the other depending on the loan slab; it generally ranges from 10-40%. It is one of the essential factors to qualify you for the housing loan. On many occasions we find it difficult to arrange the funds to pay the margin money, here is a list of things that can help you to cope with the down payment burden:

• The simplest way to accumulate funds to pay the margin money is to build a corpus from the very beginning of your professional career. Nurture the habit of maintaining a budget & monitoring the cash outflow. This habit can help you to save the pennies, which can help you in future to pay the margin money. 
• There are many lenders in the market who provides proportionate release option, in which you can make down payments in portion for the under construction projects. The developers must be affiliated by the concerned lender. This helps you to pay the margin money in fraction instead of lump sum.
• You can invest in short term equity funds, shares & bonds; in order to use the matured amount to pay the down-payment. If the borrower has a stable job profile, then he/she can go for a loan from their provident fund.
• Take help of your parents & family members to pay the margin money.

After going through the above mentioned ways to cope with the margin money payment, now we would provide you certain benefits for paying maximum amount of margin money, for taking the hdfc home loan:

• As you pay the maximum amount, the borrowed amount is lessened. As a result you have lesser debt fund to pay off.
• Lower loan amount easily qualifies you to get lower interest rates on the hdfc home loan.
• Lenders give more preferences to the loan applications which has lower requirement of the loan amount, so your application gets approved quickly.
• The processing fees automatically comes down, when you have lower debt amount on your name.

Housing loan is essential to buy a home in this market, but down payment is necessary to get an hdfc home loan. So start saving money to enjoy a hassle free loan term by paying maximum margin money.