It sounds counter intuitive to save money if you plan to buy a house. Because despite the lower amortizations of real estate today, home ownership is still expensive. The maintenance alone is enough to make you broke. But, a house is great investment for people looking into long-term plans.
With a house, you have a tangible property with a value that is increasing every year. It safeguards you from inflation and in right time, you can earn money once you sell it. But more than an investment, home ownership gives an ultimate satisfaction of knowing that the things you’ve worked hard for are put into something worthwhile.
So, if you are planning to buy a house, you must do these tips to save money:
Look for different properties.
Do not settle with the first property you find online. You can save a lot of money if you look for various locations and ask different real estate agents. If you are in USA, you can download Zillow for faster property hunting. If you are in Sydney, Lend Lease have houses for sale that could cater your budget. However, note that cheaper does not always mean better. You might end up getting scammed if you are too tight with your budget.
Allocate money for down payment and mortgage.
Be sure to divide a part of your income to your down payment, including your taxes, insurance and maintenance cost. You also need to prepare for the monthly amortizations. The amount of money you’ll spend might overwhelm you but you can do these steps to earn more money:
- Take a part time job- Aside from the typical cashier jobs you can do, you can also work online. There are plenty of video and audio transcription and blog writing tasks online that does not require much of your time.
- Sell your items- If you are a collector or you have old items you are not using anymore, sell them on eBay. You can get rid of the junks in your apartment while also earning.
- Lower your income tax- Depending where you are in the world, there is a first-time homeowners tax ‘relief’ you can avail. For exact details on how to get this, consult your accountant.
Want to snag a great home loan rate? Then be ready with a 100% down payment. But if you cannot afford it, a 20% down is enough. This immediately improves your equity and cuts your mortgage.
Change your lifestyle
Saving parts of your salary for the mortgage is not sustainable. You should also tone down your lifestyle to avoid unnecessary purchase and have more money for emergencies. This means, less partying, dining out, and shopping with friends. Evaluate your monthly bills as well. Do you really need that Netlfix contract or that Reader’s Digest subscription? If not, just drop them to save money for your dream house.
Look towards the future
It is likely that your dream house is difficult to get, so it is wiser to choose a more affordable house and renovate it to your taste. After years of building equity and paying mortgage, you can sell it and can even gain more money from it. With that money, you can search for a better property, until you find the house you want.
Homeownership is difficult because of the amount of money and time you’ll spend acquiring it. But there is a satisfaction in knowing that the house you own is achieved from your hard work. So, do the tips above and your dream house will be yours in no time.