India is quickly emphasizing the importance of women empowerment. In every walk of life, you will see more and more women are becoming self-dependent. They are no longer dependent upon male counterparts and in fact, are being supported by the males to grow stronger and self-sufficient. This is encouraging as it breaks the stereotype and ensures equal participation of women in every walk of life. However, husbands are not the only one who are evolving as per the modern world but women as well.
Financial institutions are the ones who have taken considerable steps to ensure that women participate actively and do not feel left out. For this reason, banks and NBFCs are providing women applicants with an attractive rate of interest on Home Loans. Such is the initiative that if a woman is a primary applicant, then she is entitled to receive additional discounts on base point rates when it comes to the Home Loan application. However, financial institutions have made sure that it must be a woman that leads the charge and thus, co-borrowing where she is secondary applicant is not eligible for such benefits.
The steps taken by the financial institutions have already turned out to be a boon for women applicants. It has helped them to save a substantial amount of money and will continue to do so in the long run. Now, this concerns interest rate which is female friendly. However, what about the down payment? Every Home Loan borrower knows that any lender does not provide 100% amount.
They will assist with the majority of the amount, and that is up to 85%. Rest 15-20% has to be arranged by the applicant herself. Under this scenario, many women face serious challenges as gathering substantial amount for down payment is not an easy task. Furthermore, it is advisable, be it men or women, to make a larger down payment so as to bring down the monthly EMIs. Women in India were facing serious problems with regards to down payment. However, the government has taken considerable steps to ensure that such difficulties are not faced by the women applicants.
The government is running various women-friendly schemes to help them become homeowners rather than homemakers. As an investor, it is essential that a large down payment be made to get a favorable EMI. The basic rule includes payment of 20% down payment. Apart from that lenders’ provide better rates to those who are considered to be financially stable. Thus, if a woman makes a down payment of 20%, it will help her to get an attractive interest rate. Paying a large down payment will assist in overcoming financial constraints in future as it will impact the rate of interest.
A 20% down payment helps a woman investor to avoid Personal Mortgage Insurance (PMI). The lender usually levies PMI on Home Loan borrowers in case the down payment is less than 20%. It is done mainly because the lenders are not sure about the financial capabilities of the borrower. Various lenders might even levy extra charges on your EMI for which you will be required to pay the premium. Thus, it is essential that you make a down payment of 20% and avoid this complexity.
A substantial down payment provides more control over equity. Equity is a property’s total value minus the outstanding Home Loan. As you successfully repay, your equity improves considerably. Finally, there is nothing that a woman cannot achieve, be it applying for a Home Loan, be it getting sanctioned and be it repaying successfully.