Buying a home is a significant milestone, but before you make your purchase, it is very important for you to save in advance, so that you can finance your deposit and the additional fees.
When purchasing a house you’ll need to pay down at least five per cent, but in most cases, 10 per cent of the cost of the house or property as your deposit. Plus, you’ll have to finance escalation fees, legal costs and closing costs. Therefore, it’s very important for you to save towards these expenses.
Here are few tips from our mortgage expert, Petal James, chief of branches, JN Bank.
- Budget- One practical step towards saving for these costs includes preparing a budget and sticking to it. Avoid spending on non-essential items and impulse purchases, as this type of spending impacts negatively on your ability to save and will delay your dream of owning your home.
- Open a separate bank account, ideally a high-earning savings account and set-up an automatic pay day transfer, as well as, make top-ups whenever possible. Ensure that this “home purchasing account” remains off limits. No matter what, do not touch it!
- Save any extra cash or income you earn, whether it is a year-end bonus or your NHT refund. Although it may be tempting to splurge a little, even as you save, achieving a down payment for real estate acquisition requires a lot of restraint. Hence, you should be realistic, and examine every source of expenditure, including your day-to-day expenses, and one-time cash infusions to determine how much you can really save.
The end product, owning a home of your own, will be a most rewarding achievement!
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