Saving Money Towards The Purchase Of Your Dream House!
Property acquisition is a once-in-a-lifetime choice with significant financial implications. Despite the numerous housing financing options to help with the purchase, you must still save money for the down payment, which is typically 15-20% of the home’s cost. You will also require cash to cover extra expenses such as property tax, stamp duty, and registration fees. While purchasing your ideal house is a pleasure, raising the necessary cash can be difficult. Analysts claim that the key is to begin early, around the age of 25, in order to accumulate enough money to finance the purchase by the end of 7-10 years.
Begin by saving tiny amounts of money.
Rather than being intimidated by the impending down payment need, start small. Determine when you want to buy and how many months you have till the purchase. Simply split the amount required for your down payment by the number of months you have available. If you want to take out a house loan, the general guideline is to spend no more than 25% of your net wage on the mortgage. Before you choose to invest in real estate, you may need to reduce your spending and make more money. You might also seek to establish a payroll savings plan, in which a portion of your regular income is automatically deposited into a savings account. Ready to boost your savings rate if necessary.
Invest in profit-generating assets.
To amass a corpus of Rs 50 lakh or more over the next ten years, you must invest in various types of money growth instruments, which will finally enable you to achieve a respectable rate of appreciation over a particular length of time. You can invest in mutual funds, fixed deposits (FDs), or even public provident funds (PPF). Mutual funds, depending on the insurance you choose, can help you generate yearly returns of 9-15 percent. PPF, on the other hand, gives a yearly compound interest rate of approximately 7.1 percent. The biggest aspect about investing in a PPF is that it enables you to open an account with as little as Rs 100. Unlike mutual funds, PPF investments are completely risk-free.
Consider a Systematic Investment Plan (SIP)
A Systematic Investment Plan (SIP) enables a person to invest a set amount on a regular basis in a mutual fund scheme. You may profit from the power of compounding and rupee-cost averaging by investing in a mutual fund plan via SIP with a minimum commitment of Rs 500. When you consistently invest regardless of market circumstances, you tend to obtain more units when the market is low and less units when the market is high. This considerably decreases your entire investment cost.
Check your eligibility for the PMAY-CLSS Scheme.
If you want to get a house loan to finance your purchase, see if you qualify for the Credit Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY). The policy benefits the majority of Indian society, including the economically disadvantaged (EWS), lower-income group (LIG), and middle-income purchasers. Provided to certain circumstances, it provides a rebate on the interest charged on your home loan. Most significantly, the subsidy is credited immediately to your account. This makes managing the monthly payments easier for you.
Choose a high-yielding savings account.
Saving money with a savings account is perhaps the most straightforward option. Traditional savings accounts, on the other hand, normally have a low rate of interest and hence provide a meagre return on your money. A high-yield savings account is an option if you want to earn a larger interest rate than your standard account.
Before you start saving, you should have a good sense of how much your ideal home will cost in the future. Furthermore, in order to save wisely, you must thoroughly research the market and, most likely, seek the advice of an expert.
Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.
