ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

HOW TO PLAN MARGIN MONEY FOR HOME LOAN-Tips To Help Arrange For Down Payment Needed While Buying A Home

Updated on January 8, 2011

FINANCING YOUR DREAM HOME

Home Loans In India

Buying a home with a home loan is no doubt a major financial commitment on your part. It requires a good amount of financial planning. There are several benefits of purchasing a property with a home loan, but to avail of all the benefits, including saving on income tax, you need to be aware of your personal finances. And how you can use them to maximum benefit. It is mandatory for you to arrange your down payment (margin money) on your home loan before it can be sanctioned by the concerned bank.

How Much Margin Money Is Required For A Property In India

Borrowers are required to make a down payment (margin money) of at least 20 % of the property's value. Earlier, this margin money amount was between 10 and 15 %. The RBI (Reserve Bank Of India) has recently increased the margin money requirement for home loan borrowers, especially on those with property value above 20 lakhs. Depending on the bank you are availing your home loan from, you will be required to arrange for funds between 20 and 25 % of your property's value at the time of availing the home loan.

Ways To Arrange For Margin Money

Your Hard Earned Savings : Liquidating your savings is the easiest you can think of, but it is wise to set aside enough for contingencies. And take into account prematurity charges, higher returns expectations for the future,etc.

Loan On Your Savings : Instead of liquidating your savings, you can choose to take a loan on the savings to arrange for the funds needed. Loans available against savings instruments such as FD's(Fixed Deposit) varies between 50 and 75 % of its value. Some banks offer as much as 90 % so it is good to check with your bank. Also bear in mind that the rate of interest charged on a loan against savings instruments is higher than the returns on the instruments.

Loan From Your Employer : Employers often offer their employees soft loans which can be utilized for part of the margin money amount. This is definitely worth taking since most often the interest rate is low or nil. But, this will be adjusted in your monthly take home which you must be ready for.

Top Up Loan : This is offered by some banks to help you bridge the gap in funds for down payment. But, be aware that these come with a higher rate of interest and it could be a bigger financial burden.

Always, take your time in planning your margin money before you seek that home loan. Yes, that property you saw and fell in love with, may be gone tomorrow to another buyer, but you will be better off knowing how you will manage your finances and whether it is really within your reach. I believe strongly that if it has your name on it, you will surely be able to find the necessary finances, but you need to be smart in planning it out.

My Home Under Construction

working

This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://corp.maven.io/privacy-policy

Show Details
Necessary
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
Features
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Marketing
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Statistics
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)