They start with bigger things at an early age as they consider them as big investment sources and expect better returns. If you are also one of these countless youngsters who are all set to start early in their life, then these 5 smart tips will help you get through.
1.Be financially independent
The cornerstone to making any dream affordable is financial discipline. You will get a handsome amount as a home loan but 10-25% of the total amount, the down payment has to be paid from your pocket.
Build your down payment fund by cutting wasteful spending, expanding the income pool, and clearing your debts.
2.Stick to your budget
Do you have a fair idea of where you spend your monthly income? Surely you would be spending it on grocery, electricity, dining out, shopping, entertainment, etc. but what part of it is worth.
Categorize your expenses and fix a monthly spending budget. Keep track of your spending and track your expenses.
3.Don’t just save – Invest
Simply putting the extra money aside and saving it in the bank will not help. Invest and reinvest it again and again to fetch decent returns. Where an FD will earn you a 4% return, investing in mutual funds will get you 10-15% returns easily. Yes, mutual funds are a bit risky but they are the most potential solution to beat inflation.
4.Improve your credit score
A good credit score (750+) not only makes you eligible for a home loan but gives you the power to negotiate the rate of interest as well. The rate of interest is a major concern for a home loan because of its long tenure. Pay your outstanding balance promptly and never utilize more than 30% of your credit limit to get a lower interest.
Prefer to invest in SBI tie up projects in Mohali to keep everything safe and secure.
5.Prepare for other expenses
Apart from the down payment, there are many out-of-the-pocket costs involved like stamp duty (5%-7%), registration cost (approx 1% of the memorandum of title deed), interior decoration, water supply, electricity set up, etc. These are the non-loan charges and you should plan them accordingly.
We know that buying a home is not easy but full-fledged planning can overcome it all. You might have to make certain sacrifices but everything will be worth it in the end.
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