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Home Loan Down Payment Advantages For Women

May 26, 2017

India is a country where complete women empowerment is yet to happen. Be it any sphere of life, a majority of women are dependent on their male counterparts. And this is not their fault as they have been brought up like this. Despite, many women organizations shouting for equal opportunity and not the reservation for women, a lot needs to be done at the ground level to ensure equal participation of the women in all walks of life and livelihood. And to promote the active participation of women in the society, banks have come up with an attractive rate of interests for women applicants on a home loan. If the woman of the family is the primary applicant and not a co- applicant in the home loan application, she is entitled to get further discount on the base point rates which will result in the substantial amount of money saving in the long run. However, many challenges come into play, when she is actually in the market to buy her dream home. Making a bigger down payment is not an easy task as it requires a substantial amount of savings. Smart planning and a little bit of discipline can play key roles in buying a property.

It is always beneficial for a home loan borrower, be a man or woman to make larger down payments. Also, the government is running several women friendly schemes to make them homeowners from homemakers. A large down payment is a smart move as it helps to get better interest rates on the home loan. A smart rule of thumb is making a down payment of 20%. Lenders normally prefer to give better interest rates to those borrowers whom they consider to be at a safe risk. A minimum of 20% down payment can help a woman get an attractive interest rate. A large down payment will also ensure to minimize the overall interest a borrower to pay back to the lender, otherwise. As it is said, the more money you start with, the less you need to pay. Also, it will aid to lessen the EMI burden. Who wants to pay more? And a woman is always cautious when it comes to expenditure. More money down implies she borrows less and so will be the EMI. The EMIs always affects an individual’s monthly budget which finally affects the lifestyle of the household. To save yourself by paying more interest to the lender, you should always strive to prepay the loan at the earliest or make a big down payment.

Another benefit of making a 20% down payment is that it helps in avoiding PMI. PMI or Personal Mortgage Insurance is extra insurance that lenders levy on home loan borrowers if the down payment is less than 20% of the overall property cost. Some lenders even add percentage in your EMI that is similar to an insurance policy, and one needs to pay the premium for that.

A significant down payment also gives more equity to the property. Equity is the total value of the property minus the outstanding balance of your loan. A 20 percent down payment immediately builds up the equity of the property as soon as the owner moves into it.

There is no job a woman cannot do. They are capable of doing anything and everything on this earth. Applying for a home loan, getting it approved and paying monthly installments are no exception to it. And, there is nothing wrong if a woman wishes to contribute significantly to the household finances.