Of course, when someone talks of buying a home, the discussion of a home loan comes up. There are a lot of resources on how to avail home loans, what kind of interest type to go for, and more. But people seldom talk about the Down payment. When applying for a home loan, you cannot cover 100% of the property value in it. The loan usually covers only 80 – 90% of the property value. The rest has to be paid upfront to the developer or seller.
So, before you start the home loan process on your flats in Chennai, here’s what you need to know and do for the payment.
Define a budget:
Set a monthly budget for yourself and your family, and religiously stick to it. Set both short term and long-term goals that depend on the budget. Buying a house is usually a long-term goal, where you prepare yourself for both the down payment and also the upcoming monthly EMI’s for the loan repayment. For the period before you avail the loan, accumulate your savings to reach the down payment needed to buy those flats in Chennai. Ensure that this commitment does not put a strain on your monthly expenses.
Track your expenses:
When setting a budget, you need to know how much you are spending, so you know exactly how much you can save. Not all of us are mindful of our expenses. Take some time to track your everyday expenses.
Create categories like groceries, rent, power, travel, entertainment, etc. to see what most of your expenditure goes towards. Broadly classify them into two types of expenses – Fixed and Variable. The fixed would be your rent, groceries, utilities, commute, etc, which you cannot compromise on. The variable would be luxury spending and entertainment which you can adjust to suit your current financial commitments. This exercise also helps you identify any wasteful spending, which could go into your down payment fund.
Settle your debt:
A home loan and down payment will take a lifetime of savings to be covered. If you have existing loans, it may cut into your savings and delay your decision to purchase a home. Examples of these would be personal loans, vehicle loans, and even credit card debt. It is wise to close these before you take a step towards investing in property.
Timely repayment of these debts also improves your credit score. The credit score is one of the defining factors in your home loan approval and value. Better the score, the larger the value of the home loan and reduced interest rates. This leaves you more savings to fund your down payment. It puts you closer to your dream of living in your own flats in Chennai.
Lifestyle Housing is a reputed developer of luxury flats in Chennai. If you are looking for 4 BHK apartments in Chennai, our luxury projects are the right range for you. Our 3 BHK flats for sale in Chennai are popular among first time homebuyers. Our sales personnel are expertly trained in the mechanisms of the home loan process and will help you get the best value.
