When you start earning, you make long lasting dreams and set far-fetched goals for yourself. Among the many dreams and goals on your list, buying your own dream home would definitely be a priority and you will do everything to make it your possession. For regular earning members, buying a home would be impossible without availing a loan facility. Buying a loan from a bank makes sure that you are able to get your home, achieve your dream but pay for it in small installments and slowly recover your home from the bank.
So in this entire melee, where does the concept of ULIPs fit in? If that’s what you are wondering, let us explain it to you. Nobody gives you a loan without an initial down payment and for you to fund the down payment, what better way to do it than thorugh the ULIP way? Through periodic investments in a ULIP though regular premiums you build a lump sum fund for yourself, this is the first thing to know. The second thing is about the higher returns you gain when you put your money in the long run.
So let’s now assume that 15 years down the lane, you have plans of purchasing a house for yourself. So, right now you ought to step out and buy a ULIP for yourself. Since 15 years is quite some time, meaning enough time for your money to grow, you can choose equity funds without much thinking. Suppose you had shorter goals, wherein the time frame you set to buy a house may be just 5 years, then you could choose a debt fund. For other criteria, you can choose between income based funds to balance out the risk of equities and the lower returns of debt funds.
Here’s how to plan your investment with a ULIP to help you buy your own dream home:
1.Fund Your Down Payment Expense Exclusively With Your ULIP Returns
Before you are granted a loan for your home, you need to set the down payment formalities straight with the bank. That means, if your down payment amount is around 10 lakhs, you should have invested that amount in your ULIP from a planned time period and the corpus you build plus the returns you gain should give you the net return of your requirement of 10 lakhs for the down payment. So that way, you cross a major hurdle in your home loan buying process.
2.You Can Meet Sudden Cost Requirements By Pooling Money in a Suitable Fund
If you urgent requirements of money when you are buying your dream home, be it for the additional plumbing costs or electrical costs, do not worry. If your bank loan provider doesn’t cover these costs for you, you can fund them through your own ULIP fund. Make sure you take your money after your lock in period of 5 years.
3.You Can Furnish Your Home With Your ULIP Fund
After you have purchased your dream home and you are ready to move in, you decide to set foot on the interior decoration. After all the costs passed through your home loan, this seems like another test. Worry not, plan for the same though your ULIP fund and then make use of the saved resource to get the decoration with the kind of stuff you dreamt of!
Now that you are done buying your dream home and done with the interiors too. The last thing is to hold a house warming ceremony and invite guests and relatives to share your happiness with. Would that be possible after you are drained of all the money in meeting every household expense and setting a lot of other things straight? Make sure you don’t worry because you can utilize money right away from a ULIP fund and don’t have to cut on personal expenses to make ends meet.
So, there you have it, just some of the many reasons how a ULIP could assist you and support you in realizing your dream of buying your home.