There are projects – such as buying a house – so ambitious, that they may seem impossible, unattainable. Nothing more wrong. Saving to buy a house is a matter of simple strategy.
I know people who have been dreaming of their own home for ten years
Surely, you too. Luckily, I deal with many people who have built, renovated and organized their own home in less than ten years. They have done it by earning the minimum.
Incredible? No, no so much.
Why can some and others not?
My answer is this: for some it is a dream and for others not, they are serious, decide what they want and execute the Own House Plan.
You can do the same. Buying a house is a business project (with great effects on life) and as such you must organize it. That is, you must have control, the direction of the business.
A friend has a trick that works very well
Every time he wants something important for his life (a car, a trip, a scholarship abroad, a high-end motorcycle) he usually ties a woven handle to his wrist. Nobody knows. But he, every time he sees her, remembers that he has a plan and must work to achieve it.
That is key. Some things in life are easily achieved, as if by magic. But most are the result of effort. An effort that gives pleasure. So you can copy the first step and choose a symbol that reminds you of your great plan.
The other tactics are:
- The ideal is to save at least 10% of your income. The important thing about this tactic is to create the habit, demonstrate that you are able to allocate a significant sum of money for a project and, above all, show the bank that, in effect, when you approve it, you can pay the credit month by month mortgage.
- Set a goal for the first year. That figure will not give you the chill, you will see it possible, attainable.
- Organize the budget. Surely, you will have to make changes to achieve the goal. Determine which. Can you do without buying shoes to save that money every month? What do you consider most important?
- Keep in mind that your plan is not just to save, it is the purchase of the house. Perhaps, you require a mortgage loan. Therefore, it will be a good idea to prepare the way. Paying all debts and building a good risk rating is part of the process.
- Using credit cards well: on one hand, card excesses are, in financial terms, very expensive businesses (for the interest you pay) and, on the other, buying less, borrowing less, will save more.
- Choose a financial product to deposit your savings. At the beginning it can be a trust or a savings account. Then, you can make the switch to more attractive investment funds.
- Meet the real estate market. Learn the difference in value per square meter in the different areas, the difference between a finished good with a ten year old and one under construction, maintenance costs, rental value, valuation. This management will keep the attention on the project and allow you to take advantage of good offers.
- Ask the bank for a study of your borrowing capacity. The question is: with the current income conditions, how much would the bank lend you? This information is vital to determine the minimum value you should save and what type of property you can buy.
- Using up to 25% of the savings you have in the private pension fund will help you reach the goal of the down payment or reduce the loan amount.
- Extra income is another good tactic: to teach English or rumba, work a couple of hours on weekends, organize parties, sell cakes and breads, advise … Share your knowledge.
- In the collaborative era, it sounds interesting to buy a home among several friends. The important thing is this case is to sign a document with the clear rules of the business and advise well so that none is affected in tax terms by a high increase in their income.
Actually, the time you need to save your home’s down payment does not matter. Big goals, big dreams are achieved step by step.