5 Mantras To Know When You Are Saving For A Downpayment

5 Mantras To Know When You Are Saving For A Downpayment

5paisa 5 Mantras
by 5paisa Research Team Last Updated: 2022-06-24T12:35:27+05:30

5 Mantras To Know When You Are Saving For A Downpayment

1. Start Early: Most people start saving only a couple years before they decide that they want to buy a house. The key to making the saving process easier is to start early and allow your savings to grow before you ‘need’ to buy a house. This will allow you to go at a slower pace and save smaller amounts of money each month towards the same and not pressurize you into changing your lifestyle significantly or become a burden.

2. Budgeting: The first step is to sit down with your income and expenses and figure out in what range you could buy a house and what kind of down payment you could afford. It is essential to go over the expenses that you are currently incurring and see where you could cut down and save money. Set a realistic budget for the future and try to stick to it. Ensure that you put aside a portion of your income towards saving for the down payment each month.

3. Discipline yourself by automating your savings: If you are not the kind of person that could be disciplined about saving, then consider automating them. Decide how much you would like to save each month and set up an automated transfer of that amount to a savings account at the start of each month or start Systematic Investment Plan (SIP) in a mutual fund scheme of your choice. This will make saving and investing a habit.

4.  Make the most of your savings: Consider maximizing your savings by starting an SIP in an equity mutual fund. Since equities are best if you have an investment time frame of more than 5 years, it is always best that you start this as early as possible. An SIP will not only automate your savings and inculcate discipline, it will also help you reap the benefits of equity investing while smoothening some of the volatility associated with equity markets.

5. You also have to pay interest: When you are looking to buy a house, the down-payment is not the only thing you need to consider. You also need to consider the monthly instalments that you pay for your home loan. You must ensure that you always have savings in a liquid investment that can take care of at least one year of home loan instalments.

Start Investing in 5 mins*

Get Benefits worth 2100* | Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account

& get benefits worth 2100*

Resend OTP
Please Enter OTP
  • Have Promo code?
  • Use code ACT2100
Enter Promo code
Account belongs to

By proceeding, you agree to the T&C.

Start Investing Now!

Open Free Demat Account in 5 mins

Enter Valid Mobile Number