What do you look for in your dream home? A well connected location, family oriented amenities, budget friendly price and of course, a trusted builder. Once you zero in on you prospective home, the payment factor is in. You chalk out your budget, see how much down payment you can do and how much loan is required.
Banks lend 80% amount of the property value. Considering all other essential costs for a family, planning the amount of down payment can be challenging. But do you know that just one factor of down payment can make a big difference to how much the home will cost you? It is always better to make a large down payment. Check out the benefits of making a large down payment.
You get easy loan approval
Paying large amount of down payment proves your ability to save money and also your creditworthiness. So the banks trust you and you can choose the loan of your choice. Plus you get easy approval because of your early down payment.
EMIs get lower
When a larger down payment is paid, you need to borrow less loan amount from the banks. Consequently EMIs get reduced. You can save more money and allocate it to whatever your priorities.
No compromise with lifestyle
Heavy EMIs make it difficult for you to fulfil your dreams of foreign trip, new car and so on. With low EMIs your lifestyle doesn’t need to be compromised. More money is at hand to do what you want to do. Life gets happier and enriching. Isn’t that worth it?
You can be loan free sooner
With most of the property value paid at the beginning, your loan amount gets lesser and your interest rate lower. It means you will be free of loan earlier than the stipulated period. A huge burden will be off your shoulders in time.
You can save for other priorities
Larger down payment will also enable you to plan your other financial priorities. If your son wants to go abroad for higher studies you can save for that. Or if you want to create substantial retirement fund, the saved amount can be allocated to that purpose.
So once you have finalized your dream home, chalk out a financial plan. Check your savings and investments. See where you can cut corners and pay a large down payment. It will be greatly rewarding in the long run. Wish you happy home buying!