Let’s suppose a home you prefer is priced at 50 lakhs then 50 lakhs + 10 lakhs (20% of 50 lakhs) is the amount you would like to buy your dream home. 20% addition could include – taxes, paperwork, brokerage, repair, renovation etc.
A cost breaks up helps to work out what needs to done and sets priorities for various jobs. Let’s continue with the same example – The behemoth sum of 60 lakhs has to be paid to possess your dream home; however, do you have sixty lakhs?
If you invest Rs. 15,000 per month at a modest 10% rate of return it might take nearly 15 years to attain that target.
And just in case you missed, with the standard rates of appreciation in property price, your dream home can cost nearly 2.5 crores after 15 years.
Hence, saving money for a lifetime and then buying a home becomes not possible.
The solution remains ‘buy now and pay later smartly’. But how? Let’s see.
If you apply for a home loan, any bank or NBFC can ask for a down payment. Down payments will be as low as 3%. But, a 20% down payment is highly recommended. As a result of the lot of you pay direct, the less you have to pay later. 20% amount draws that ideal line between one-time payment and loan amount.
Ways to save lots of for buying your first home
1.Invest in growth opportunities
It is imperative to direct a section of your income towards investment through Systematic Investment Plans (SIPs). For instance, if you start finance Rs. 24,000 a month in SIP, with a modest return of 10%, you’ll be able to build a considerable fund of Rs.10.1 lakhs, during a matter of merely three years. In this manner, you’ll be able to only save for your down payment without even worrying about lifestyle changes.
A few secure investment choices for the short term are NCD the fund, Equity-based mutual funds and ELSS.
2. Move-in a reasonable rented flat
Assuming you are living in a rented housing currently, consider moving to a smaller, less-expensive house. Rs. 5,000 drop in your monthly rent will save Rs. 60,000 annually. If you are single, maybe it might be possible to measure with roommates or flatmates. Cutting price and sharing the load will save over one lakh.
3. Minimise on luxuries
You’ve probably already patterned that big brands, costly garments, jewellery and furnishings are out of the question. However do not get disheartened even tiny things will count as luxuries, and people small things add up. A smaller car or a couple of less exotic vacations will prevent tons of money over the years.
4. Trim excess expenses
People ignore small savings. However, they add up to a substantial add. For example, less costly gym memberships, cheaper mobile phone plans, discounted grocery things, etc.. It takes time to get used to it. However, it’s a necessity if you are serious about saving and designing for buying your own home.
5. Earn more money
Don’t merely search for ways that to save lots of, additionally look for ways to earn. are you able to freelance or get a part-time job? Can you work on weekends or spare your time to conduct classes? Use your skills and place all of this additional payment into your dream home.
But while doing all this, do not hamper on necessities!
Avoid costly restaurants, massive brands and expensive gyms. However, do not 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.
Related Post – Who can buy a home in Pune?
A lot of people ask “How to save for a house in a year or six months” or “How to save cash fast for a house”. You’ve got to clear this in your mind that saving takes time. First time home buyers have to have patience, whereas saving for a down payment.
Consistency, determination and our saving tips will indeed, help you reach your goal of buying your own home.