Securing Your Dream Home: How Selling Gold Can Ease Down Payments for Salaried Individuals

What is Down Payment?

Down payment is the amount you present to the lender when taking a Home Loan. While a home finance company offers loans to cover a major percentage of the property’s cost, you must pay the remaining amount from your sources as a Home Loan down payment. For instance, if the loan provider covers 80% of the property’s cost, you must pay 20% upfront of the total cost. If you want to buy your dream home but don’t have the resources to make the down payment as well, gold assets can help you in that case.

Now that you understand the down payment meaning, you must be wondering how much you need to pay and how you will arrange it. Well, the payment you must make depends on the loan-to-value ratio that the lender offers. It is the percentage of the property’s value that the lender finances. Borrowers with robust financial stability and solid credit ratings achieve a high LTV ratio, minimising the down payment they must make.

If you want to sell gold for the payment, Muthoot Gold Point offers you a reliable and smooth platform for buying and selling gold online. Let’s explore more about the option.

Advantages of a High Down Payment

If the lender offers a low LTV ratio, you must shell out a bigger sum to cover the payment. A high down payment might seem unpleasant initially, but it offers multiple advantages, including the following:

• Low Debt Burden: A lower debt burden is always desirable. A bigger down payment reduces your dependence on a Home Loan. Hence, a lower Home Loan amount means smaller EMIs you can easily manage.
• Save on the Interest Component: Similar to the above point, if you borrow a smaller loan, the interest component will also be lesser compared to interest on a bigger loan amount. It will also shorten the repayment period, saving money on the payable interest.
• Favourable Loan Terms and Conditions: When you pay a low down payment, it generally projects you as a high-risk borrower. Conversely, a bigger payment indicates sound financial capacity to own the property. Ultimately, it resonates with favourable loan terms and conditions from the finance provider.

How to Save for a Home Loan down payment?

Here are the top tips to save money for a Home Loan down payment:

• Set a Goal: Set goals by following the 50-30-20 rule. It means allocating 50% of the income for fixed costs, 30% for discretionary expenses, and 20% for savings.
• Start Budgeting: Start budgeting and make significant lifestyle changes to increase your savings. Live within your means for at least 2-3 years to save enough for the down payment.
• Automate Savings: Subscribe to a regular investment plan and automate savings to inculcate a habit of regular saving. Doing that will build a significant corpus over time without making any conscious effort.

How Can Selling Gold Help in Building Your Dream Home?

Selling gold to build your dream home offers several benefits, including the following:

• Quick Money: If you need urgent money to buy your dream house, selling gold can arrange funds in minutes so you don’t miss the best deal.
• Practical: Do you have old broken necklaces, dented rings, or unused gold jewellery in your locker? These items have no value to you if they sit around and gather dust. Selling them for arranging the down payment puts them to good use and helps you buy your dream home.
• Good Value: The gold prices are always increasing. Selling gold for cash is a lucrative funding option. You can quickly make your down payment without liquidating your other investments like fixed deposits, etc.
• Extra Money: Apart from the down payment, you can also receive some extra cash to remodel the property or design it according to your desires.

Advantages of Selling Gold for Dream Home

There are several advantages of selling gold for a dream house, including the following:

• High value for gold assets
• Easy options for buying and selling gold online
• Quick cash available for the down payment
• Unused jewellery put to good use
• Extra cash for home repair, renovation, or designing

If you are looking for cash for gold, use the gold calculator available at Muthoot Gold Point to find the best value of your asset. The tool uses a standard gold calculation formula to determine the gold’s price according to its weight and purity. Choose the purity and accurate weight, and select whether it has stone in it or not. Press ‘Calculate’ to estimate your gold’s value and the loan you can obtain against it.