Gone are those good old days when there was an unwritten rule that you should start planning for purchasing a home only when you’re settled in life. Back then, ‘settled’ would mean getting married and having kids. Times have changed and now numerous youngsters have started believing in the fact that you should start early as long as the bigger investments in your life are concerned.
There’s no doubt that buying a home early in life has got certain benefits. You will spend a major part of your working life without having to worry about your rent and also keep getting greater returns on your home (an appreciating asset). Just as you have to pre-plan your holiday season so as to keep it thrifty, for buying a house too, you have to plan beforehand. You can click here to know more on holiday planning.
- Be financially able to bear the down payment
Unless you become a financially disciplined person, you can never realize the dream of buying a home. The downpayment of the house has to be paid by you out-of-pocket. Unless you have enough savings for this, how are you supposed to make the payment? The downpayment is usually 10-25% of the market value of the house. Hence, if you have to build your funds, opt for cost-cutting, trigger off your debts by seeking help of a processing business and boost your income.
- Keep a tab on your budget
Do you have a list of the expenses that you incur in a month? Do you spend on groceries, rent, shopping, dining out and entertainment? If you don’t keep a tab on your expenses, start analysing it as soon as possible. Categorise on your expenditure and know how you should spend your money by following a budget. You should compare your expenses with your income and track the way you spend your dollars.
- Do a comprehensive market research on your home
Just as you do a research on local moving services before hiring a mover, you should also do a comprehensive market research on your future home. Are you looking forward to buying an independent house or an apartment or a condominium? What are the numbers of bedrooms that you’re looking for? What are the basic amenities that you can pay for, swimming pool, car parking or club house? Make sure you set a budget which is in line with your repayment ability.
- Invest instead of only saving money
If you have been keeping aside surplus income in your savings account and thinking that’s enough, you’re wrong. You should choose to invest your funds. While a savings account can help you earn an interest rate of 4%, a fixed deposit or an FD account will fetch you 6% p.a before tax. A recurring deposit will help you earn 7%-8% p.a before tax.
Once you follow the above listed points, you can easily be able to realize your dream of buying a new home. Make sure you transform yourself to a financially responsible person.