
Research the market. Know the amount you require for the house you want
Everyone will have different savings goals. For example, a young bachelor might want to save for a one-bedroom flat in the city Centre while a younger couple could set their sights on a semi-detached house in the countryside.
This is why it is important to start off with your own research and find out how much houses and flats in your chosen area will cost. This can be done by simply visiting an estate agency online to view not only the asking prices, but how much property has sold for on the particular street or area where you want to buy.
After this you can realistically break down your saving schedule and figure out how much you need to save monthly for your house.
When determining your deposit amount, it is also important to remember that buying a house doesn’t only include a deposit. Legal, valuation, conveyancing and admin fees are just some of the costs you may encounter and should be factored into your deposit amount.
Set a budget and a timeline
Once you have determined your savings goal take some time to sit down and itemize all the money you have coming in and going out. If you are looking to save towards a house deposit with a partner, include their income and expenses too. After this you should come up with a figure that you are comfortable contributing towards your house deposit each month and a general estimation on how long it should take you to reach this goal.
Differentiate between Needs & Wants. Get rid of all extra expenses
By now you should have a general plan on how to own your first home. However, it is a common mistake to make this a one-off calculation. Potential first-time buyers should revisit their plans every so often as you will be surprised how much can change in a short period.
For example, you might gain a promotion at work which comes with extra pay benefits. At this stage you might feel inclined to commit more money towards your house deposit. Try to create a fine line between your needs and your wants. This will help you in keeping a track of your expenses and would help you save faster and better.
Explore different saving options (Bonds, Mutual funds ETC.)
However long your timeline is for saving for your down payment, promise yourself that for that length of time you’ll put any gifted funds or windfalls you may receive toward that down payment. Get a bonus at work? Put it toward the down payment. Try investing in bonds or mutual funds which can help you save up a good amount for your home. It will help you build a habit of saving and investing that will serve you well as a homebuyer, and as a homeowner.
Be consistent & patient with your goal
Once you have an estimated budget for your future home, calculate the minimum and maximum down payment amounts and set yourself a reasonable and attainable goal. Target an amount you want to save for your down payment and include a timeline, such as, “I want to save x amount of money in x amount of time." Also during this time prices may vary and change due to economical situation in the country, but do not lose your patience and stay consistent while saving up and you will have the exact amount soon for your new home.
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