Before you begin saving for a home, you first have to know how much you'll need to save. So do some online research and find an estimated value of the home you wish to buy. Add 20% of that estimate to the original cost.
Let's suppose a home you like is priced at 50 lakhs then 50 lakhs + 10 lakhs (20% of 50 lakhs) is the amount you need to buy your dream home. 20% addition may include - taxes, paperwork, brokerage, repair, renovation etc.
A cost break up helps to determine what needs to be done and sets priorities for different jobs. Let's continue with the same example - The behemoth sum of 60 lakhs needs to be paid to own your dream home but do you have 60 lakhs?
If you invest Rs. 15,000 per month at a modest 10% rate of return it would take almost 15 years to achieve that target.
And in case you missed, with the standard rates of appreciation in property cost, your dream home will cost nearly 2.5 crores after 15 years.
Hence, saving money for a lifetime and then buying a home becomes impossible.
The solution remains 'buy now and pay later smartly'. But how? Let's seeā¦
If you apply for a home loan, any bank or NBFC will ask for a down payment. Downpayments can be as low as 3%, but a 20% downpayment is highly recommended. Because the more you pay upfront, the less you have to pay later. 20% amount draws that ideal line between one-time payment and loan amount.
Don't just look for ways to save, also look for ways to earn. Can you freelance or get a part-time job? Can you work on weekends or spare some time to conduct classes? Use your skills and put all of this extra pay into your dream home.
But while doing all this, don't cut down on necessities!
Avoid expensive restaurants, big brands and expensive gyms. But don't cut down on good food, clean clothes and healthy living. Instead, eat at home, buy in the discount sale and use parks and open areas for a healthy lifestyle.
A lot of people ask "How to save for a house in a year/6months" or "How to save money fast for a house". You have to clear this in your mind that saving takes time. First time home buyer's needs to have patience while saving for a down payment.
Consistency, determination and our saving tips will definitely help you achieve your goal of buying your own home.
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