Learn about the different ways to save money for buying a house.
Purchasing a house, no matter how big or small is an important life goal. However, buying the house of your dreams can prove to be expensive. Most people have to rely on loans and undertake careful financial planning to achieve their goal of becoming home buyers. To ensure that you can save for a house of your own, you can follow these handy personal finance tips mentioned below. Read on to know how to save money for a house.
You can save your money in a High-Yield Savings Account and shoot two birds with one stone. With a High-Yield Savings Account, you can park your idle cash and create a nest egg while earning interest on the deposits. Thus, you will save money for a house and earn additional income.
You can easily build a corpus that will allow you to save money for a house by investing in different instruments. Based on your risk profiles, you can invest in instruments like Mutual Funds, equities, government and treasury bonds, etc. You can even opt for Public Provident Funds (PPFs) or Fixed Deposit (FDs) to build a corpus while preserving your capital amount and reducing investment risks.
Managing your personal finance is a crucial aspect of how to save money to buy a house. You can try to increase your income sources and find ways to generate passive income. For instance, if you are good at something, you can make that your side hustle to generate more revenue. Save money from your passive income sources in a dedicated account, and do not withdraw. Your passive income sources can help build that corpus needed for a down payment.
To achieve a big financial goal like buying a house, you need to create a budget and stick to it. This means giving up unnecessary expenses like impulse buying and regular takeout. Also, avoid utilising your entire credit limit on credit cards so that your credit score remains high. High credit scores can prove instrumental when you decide to buy a house through a loan.
The Pradhan Mantri Awas Yojana (PMAY) is a government initiative designed to help individuals purchase or construct their first homes. PMAY is a Credit-Linked Subsidy Scheme (CLSS) that offers subsidies to families falling within three distinct slabs categorised based on their annual income.
By following the above practices, you can save money for buying a house. Once you create sufficient savings, you can take out a Home Loan and repay it in pocket-friendly monthly instalments over tenures lasting up to 30 years. Since real estate rates are at an all-time high, a loan can help you buy your dream house. Remember to consider housing costs, property taxes, and other aspects of buying property when you save money for a house and be prepared for expenses associated with purchasing a property.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.