Buying a home at an early stage of your life is one of the greatest achievements and investments. Buying a house is a necessity but you also must make a substantial financial commitment towards it. When it comes to meeting the down payment requirements of a home, it can get tougher. You have to part with a substantial amount of money in one go to meet the down payment of your chosen house.
There’re many traditional ways of arranging funds for your down payment which are as follows:
- Borrow money from family and friends.
- Saving a fixed amount from your salary for some time.
- Liquidating your contingency funds like FD, mutual funds or even selling your property.
- Taking a loan against your property
- Taking a loan from the bank or any other lending institutions.
Along with all the above-mentioned ways of raising the funds for the down payment, a novel and unique method have been introduced to the Indian populace recently. An enterprising fin-tech company named HomeCapital has introduced an interest-free Down Payment Assistance (DPA) Program for the first time home buyers.
It is their conviction that everyone ought to get an opportunity to buy a home at an early stage of their life. They help the buyers meet their down payment needs for buying the house of their choice. HomeCapital has tie-ups with the best financial institutions and real estate groups in the country.
It has pioneered the Down Payment Assistance Program through its technology platform and brings together financial institutions, developers and home buyers together to facilitate the home-buying procedure. On the projects listed in the Program, homebuyers can apply and receive Interest-free down payment assistance. An in-depth guide is also provided in the Indian context for the home buyers which will take you through various stages of home buying, detailing the factors affecting the decision at each stage and help you make an informed decision weighing all facts and figures.
So, thanks to HomeCapital, you can now get an interest-free loan for a home down payment requirements if you are a first time home buyer and purchase your dream home today rather than some time in future.
Those millions of prospective homebuyers who are eligible for a home loan but face the down payment hurdle, HomeCapital expands the offerings by regularly including new projects in the Program.
HomeCapital has revolutionized the process of home buying in the current times. It’s no longer mandatory to wait for a long time to collect your savings to meet the down payment requirement for your new house. You just have to become a Member of HomeCapital DPA Program to avail the benefits of the same. To avail the benefits of the HomeCapital Down Payment Assistance Program, all you need to do is to go on their site and register yourself to become a member. You, then, become eligible for around 50% of the total down payment requirement that’ll be provided to you as an interest-free loan given that you meet their eligibility criteria.
Everyone wishes to buy a home in their dreams, but shopping for it at an early degree of lifestyles is more essential.
Now, of course, absolutely everyone would want to stay inside the near proximity from their jobs.
People will opt to stay near their jobs and critical offerings like colleges, hospitals, transport services and so forth.
They include factors like Evolving Family Structure, Demographics, Affordability, the choice of buying or renting and plenty more.The maximum crucial of all is to decide whether or not to shop for or to lease a house.
Well, both have their own blessings and losses.
Here’s a small evaluation among buying and renting:Buying:Having a domestic offers an experience of ownership & pride.
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What is Mortgage Down Payment?A sum of money that a buyer pays in the early stages of purchasing a home is called a mortgage down payment.It is a portion of the total purchase price like an advance, and the buyer will often take out a loan to finance the balance.How do Down Payments Work?A common example of a down payment is a mortgage down payment that you pay when you buy a house.Before taking out a mortgage from a bank or other financial institution the home buyer pays a percentage of the total price of the home upfront, and the mortgage covers the remainder.It is similar in the case of down payments on car purchases.
A down payment is also referred to as a deposit.In some cases, if the deal fails because of the purchaser backing out the down payment is not refundable.Examples of Down PaymentsHome Purchases:In the United States, the traditional standard of a down payment on a home has been 20%.There are mortgage down payments with 10% or 15% as well, and the Federal Housing Administration FHA loans are ways to buy a home with as little as 3.5% down.Cooperative apartments or co-ops, which are common in some cities is a place in which a larger down payment is often necessary.Many lenders will insist on 25% down, and even though it is not the norm some high-end co-op properties may even require a 50% down payment.Auto Purchases:If you are purchasing a car a down payment of 20% or more can make it easier for a buyer to be approved for a loan and also get a better interest rate and other terms.For buyers who qualify, car dealers may also offer promotional terms of 0% down.
While that means it doesn’t require any down payment, it may also mean the lender will charge a higher interest rate on the loan.The Advantage with a Large Down PaymentIf you can afford to make a large down payment it will decrease the amount of interest you’ll pay over the life of the loan, resulting in lower monthly payments, and, in some cases, make insurance unnecessary.
Here are the details:Interest:If you make a bigger down payment, you’ll have to borrow less and you’ll also pay less interest.For instance, if you borrow a loan of $100,000 with a 5% interest rate, you’ll pay an interest of $5,000 in the first year alone.However, if you put down $20,000 and borrow only $80,000, then your first-year interest will be $4,000 resulting in a saving of $1,000.Over the long term, this difference is even more dramatic.
Let us take the same example of borrowing $100,000 at 5% interest, it would cost you $93,256 in interest over a 30-year period.And if you borrow just $80,000 then your total interest cost will be $74,605 saving you nearly $20,000 in long run.Additionally, a lender may offer you a lower interest rate on your loan since you put more money down because you now represent less of a risk.Monthly Payments:A larger down payment will also reduce your monthly outlay.
By taking the same example as above, a loan of $100,000 would require monthly payments of $537, while an $80,000 loan will result in $429.Mortgage insurance:While buying a home, a larger down payment can help you avoid having to pay for private mortgage insurance (PMI) which compensates your lender in case of non-payment of your loan.Your lender will generally not require PMI if you put down 20% or more.
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