Indians consider home purchase as the most crucial goals of life to get a roof over head. House dream tops the ‘lifetime to-do’ list of most people. Reasonably high salaries and reduction in home loan rates are major driving forces behind home purchase. But, a home loan is not just enough to completely achieve the goal.

Banks, traditionally offer 80% of the property value as home loan. Rest 20% has to be paid upfront by the buyer as ‘down payment’. So, the buyer needs to arrange for the down payment towards buying a house.

Additionally, the buyer has to be prepared for other related expenses like registration cost, government taxes, costs towards interiors, and home insurance.

Arranging a lump sum amount to meet these needs could be a daunting task, unless well-planned. Read this Moneymindz blog that has compiled a few practical tips on how to meet your down payment expenses, backed by our research on Buy Vs Rent scenarios across the major Indian cities.

Accumulate money to build the corpus required for down payment. Begin with dedicated savings towards your goal of buying a home. With disciplined savings, invested for long term,  you can reduce your debt burden. Compared to simple savings, investments through right channels help you grow your money with good returns, thereby reducing your time to realise your dream.

Give enough time for investments to grow enough to meet down payment need. The period you need to dedicate for the accumulation is based on many factors like your annual income, the price of the property, the locality, and your lifestyle.

You can achieve your goal faster if you increase your monthly savings. A 20% of your income invested in a portfolio with 10% returns, can accumulate enough for down payment towards buying your dream home in 4 – 5 years. Increasing your monthly surplus will be a good idea to divert more than 20% of your income every month towards investments.

A thorough analysis of your expenses, assets and liabilities by a certified financial planner, helps you increase your surplus by 21%. For a detailed financial plan, get in touch with our financial advisors.

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