Buying a home is an exciting life milestone, but it can also be intimidating. Buying a house is exciting and life-changing. What’s not as much fun is saving for the deposit. But the more money you put down upfront, the less you’ll have to borrow. Your home will probably be the most expensive purchase you’ll ever make, so you want to establish a responsible plan for ownership.
There are many ways to save for a home that don’t require major changes to your lifestyle. With a good savings plan and some discipline, you’ll soon have the deposit for your home. If you want to have your own little piece of property to call home, a place where you can paint the walls any colour you like, and hang paintings on every other wall, one has to start saving.
The first home owner’s grant will get you started, and depending on your state, you may be able to access other grants or stamp duty exemptions. The following tips may be helpful to anyone with the dream of saving so as to buy a home for themselves.
At least save 10 percent every month
This tip only works if one is going to be disciplined and is ready to stick to it. You will have to be paying yourself before paying anyone immediately you get your salary.
The best way to achieve this is to designate one savings account, ideally at a different bank to your normal lender, to make it harder to access the money. Then transfer 10% of your net pay each pay period. It might mean you have to miss out on a few restaurant meals out throughout the month, or you may have to brown bag your lunch when you run out of cash towards the end of your pay cycle, but it will be worth it in the long run.
Check Out property prices
The property market is always changing. To get an idea of property prices in the area you want to buy it will be advisable to have a look at online real estate websites, go to auctions and one can also read the property section in local newspapers.
Do not overspend
When one has already made up their minds that they want to buy a home, they should make sure that they get a realistic amount for their financial situation. Go for what you can manage to spend on. some of the factors to be considered include the mortgage rates, closing costs of the house, down payment, private mortgage insurance and a potential prepayment penalty.
Set a down payment
Once one gets a realistic price range for the house that they want to go for, make a down payment goal. A 20 per cent down payment is the best possible balance between effort needed to save it up and bang for your down payment buck
Eliminate the luxuries
Although it’s no fun, tightening your budget a little can be an effective strategy for saving money for your first home deposit. You can start by eliminating or downgrading the luxuries from your life, and then using the cost savings to fund a savings account. You don’t have to skip everything at once, however; instead, eliminate one luxury per month, pocket the savings, and then move on to the next thing. Over a period of twelve months, you could easily save a few thousand shillings by alternating between life’s little luxuries.