How Long Would It Take You to Save for a Home’s Downpayment?
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If you think it's impossible to ever save up enough for a downpayment, we're here to tell you that you CAN, except it might take a couple of years as well as lots of discipline and commitment!
Wanting to purchase your first property can be as easy as 1-2-3… as long as you’re able to overcome the first (and largest) roadblock: the downpayment!
Now, the minimum amount that’s generally forked out for a downpayment is 10% of the property’s price, and you’d probably be thinking how long that’s going to take you to save up.
Well, that’s all depending on a couple of key factors:
• What’s your monthly salary like
• How much you’re able to set aside each month
• The price of the property you’ve set your sights on
• How soon you want to move
5 ways to help you save for a downpayment
1) Plan and know how much you need
Research, research, and RESEARCH on all the localities in order to find the one you most prefer. From there, you can then get the average prices of homes in the neighbourhood, and calculate the downpayment required.
After that, it’s all down to your discipline, commitment, and patience! Avoid unnecessary expenses (is that third cup of bubble tea really necessary?) or taking on more commitments, like a loan for a brand new car.
2) Don’t ignore the other costs involved
Did you know that the downpayment isn’t the only cost you’d need to be worried about? There are other costs that go towards homeownership, i.e. legal fees, stamp duty fees, and land tax to name a few.
3) Get your home loan pre-approved
What this means is that you basically use an online solution to help you check on how much of a home loan you can get approved for, before you apply to the banks.
4) Increase your monthly salary
Sometimes, just saving up a bit each month may not be enough. Start considering other ways to increase the amount you bring home, simply because more income = more savings.
5) Safeguard your downpayment fund
If you’ve already been following the pointers above and have been able to put aside quite a healthy amount of money towards your downpayment, good for you!
However, what if one day you were to meet with an unfortunate road accident that leaves you hospitalised, and in need of emergency cash?
It’s a fact that we won’t be able to predict the future, nor be fully prepared for it, but what we can do is safeguard our finances.
Make sure you have a separate savings fund which you can dip into for emergencies, so you don’t need to touch that precious downpayment.
In addition, you could also sign up for a health insurance plan that comes with an accident cover, as that will definitely be a life-saver (literally) when it comes to anything medically-related.
This article was contributed by PropertyGuru. You can read the original article here.