From time immemorial, owning a house has been a dream for most people in the world. But for a lot of them, a lack of awareness in this matter gives rise to confusion and apprehension, especially when it comes to borrowing a loan.
In fact, one of the most commonhome loan myths is related to down payments.
In this article, we deal with the 5 most common home loan down payment myths for you.
Myth #1 It’s Best to Buy a Home When You Have Enough Savings
Fact: We’ve been fed the common myth that buying a home is a risky investment and that a good amount of savings is essential to actually make a purchase. We also live by the myth that getting a loan is a hassle and is meant for those with a low income. This, coupled with the lack of knowledge on down payment, creates immense misconceptions in the minds of buyers. However, none of this is true. Today, there are multiple home loan products in the market to financially assist home buyers. If you can furnish the required down payment amount, there is no reason to worry about having enough savings.
Myth #2 20% Down Payment Is Required to Buy a Home
Fact: Heard this one before during your search for a perfect home? Don’t be disheartened because it’s hardly the truth. Such myths are common amongst first-time home buyers, because the commonly quoted percentage of down payment in the market stands at 20. Generally, sellers are more than thrilled to accept a minimum down payment for home loan of as low as 5%. So, don’t be on a run to arrange large sums of money when you can do it for much less! Have a discussion with your realtor about the minimum amount and you will find that it is easy to purchase a house of your own without having to put down a large sum.
Additional Read: Best Tips to Plan Your Down Payment for Home Loan
Myth #3 Buying A Home Will Cost A Fortune
Fact: Being calculative about the current market scenario before buying a home is certainly a smart move. In a constantly changing market, is there really a right time to buy a home? Well, though your fears are valid, you aren’t alone in this! There are many lenders in the market offering attractive loan schemes to help you buy the house of your dreams. Before you choose a lender, do your research and use an online home loan EMI calculator (typically available free of cost) to calculate your repayment schedule after you extend the down payment.
Myth #4 You Need a High Credit Score for a Loan
Fact: The primary requirement for a home loan eligibility is to demonstrate your financial responsibility using a good credit score. A good score will certainly fetch you favourable loan terms. However, even if you don’t have a spotless credit history, you can still get a loan to purchase a house. All you need to do is arrange for the down payment sum and you can fund the rest of the amount with a loan.
Additional Read: Home Loan Down Payment Advantages for Women
Easy Home Loans at Tata Capital
Well, wondering how to manage your finances after the down payment? Trust Tata Capital for easy home loans, designed to support your home buying journey. With competitive home loan interest rates and flexible tenures, Tata Capital brings you one-step closer to the home of your dreams!