Tips on crowdfunding home downpayment - Home Loan Blog - Tata Capital

I have exactly 3 lakhs in the bank but I want a home worth 42 lakhs. Is there any way I can do it?

Mar 08, 2017

That is a pretty tricky situation to be in. You have funds but the amount is not sufficient to put up as downpayment and allow you to purchase your dream home.

So what should you do?

Unfortunately inspite of being fully capable of servicing future Home Loan EMIs, many people postpone buying their houses because they are unable to raise money for the down payment.

Lenders are willing to lend to reliable and credit-worthy borrowers only if they can pay 15% to 20% of the total amount from their own sources. But that is easier said than done.

So in case of a home worth Rs 42 lacs, the banks would ask the borrower to bring in 20% as down payment, i.e. Rs 8.4 lacs from his or her own sources. As mentioned in the title, the amount available is Rs 3 lacs. So the shortfall of Rs 5.4 lac has to be bridged somehow.

Now ideally, one should only decide to buy a house when they have saved enough money to pay the full downpayment. However in reality this may not always be possible. So in such circumstances, you can explore the following options:

  • Who can help you in times of need? Your family members and friends. Isn't it? So if they have spare funds, borrowing from them could be an option you can consider.
  • You can even approach your employer for a short term loan. Most employers are willing to lend money to their employees at quite low interest rates.
  • You can also raise some money against your shares, FDs, insurance policies, NSC, bonds, etc. The best part about this route is that it gives you instant liquidity without having to sell your assets.
  • But if nothing works out, its best to wait more. As no-show as it sounds, sometimes bidding time is the best way forward. You can continue saving and also keep track of other alternative sources of funds as discussed above. When your increased savings and funds from other sources are enough for downpayment (or even for more than that), you can go ahead and take the home loan. You don't want to drown yourself in a sea of loans. So its best to be prudent about buying your house that you plan to purchase using borrowed money.