Financing Home Ownership: Here’s How to Go About It
When Aditya and Rupali decided to purchase their dream home, they were quite confused. The newly married couple didn’t know how to get started with homeownership and finance their first big purchase. “We were thoroughly confused about the entire exercise. We didn’t know how to start and didn’t want to rush,” says Aditya.
They are not alone. Many of us are not sure about going ahead with homeownership and financing.
The article aims is to simplify the concept for you to get started. Let’s begin.
Before delving deep, let’s first understand what is homeownership? Simply put, it’s to own your home. When you buy a home and register it, you are its legal owner. Homeownership involves a considerable investment of time and money, and therefore you must meticulously plan the entire exercise. To begin, you must first:
Plan, Decide the Home You Want to Buy and Get Started Early
So, first, decide on the type of home you wish to buy - apartment, villa, bungalow, farmhouse, etc. Once you have chosen the type of home you want to buy, the next step is to accumulate the necessary funds for making the downpayment. Start early to have more time to acquire the desired money.
Get the Necessary Funds for the Downpayment
You need to pay the remaining Rs. 10 to 20 lakhs as a downpayment. You can accumulate funds for the same in several ways, such as investing in a fixed deposit or starting a systematic investment plan (SIP) in a mutual fund.
As said, the earlier you start, the more time you have in your hands to collect the amount required for the downpayment. Especially with SIPs in mutual funds, the power of compounding can help you quickly accumulate the desired funds.
However, if you are finding it difficult to arrange funds for the downpayment, find out if the lender has the option of parallel funding. Prominent lenders such as Godrej Housing Finance offer this facility whereby the downpayment amount is split into smaller amounts. You can make the payment as per the construction stage, and this eases the burden of making a large upfront payment
Bridge the Shortfall with a Home Loan
Look out for better flexibility in terms of repayment and help you design your EMIs in a manner that ensures you don’t end up stretching your finances. For instance, Godrej Housing Finance offers EMI breaks when required and helps you design your EMIs in a manner so that you can pay them with ease.
Today, almost all lenders spell home loan eligibility and other information such as interest rates on their websites. Compare different offerings and choose the one that best suits your needs. Note that a good credit score can help you get housing finance at a better rate of interest.
Also, before you opt for a home loan, have a repayment plan in place to make sure you pay your EMIs on time. It is advisable to opt for lenders offering loans on flexible repayment terms to avoid becoming a burden in the future.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to the product or service document and/or connect with our customer representative prior to making any financial decision.