How to Keep Funds Intact While Planning to Buy Your Dream Home
Buying a new home and living there is a dream of many. If you, too, have this thought somewhere deep in your heart, you must start saving from today. You must pre-plan to achieve your dream without landing on financial challenges.
If you know little about savings and home loans, here are a few ideas to be acquainted with. It is crucial to begin setting up as early as possible.
Savings Plan for Your Dream Home
Suppose you want to own a house by the age of 35. In that case, your forethought and drafting must start when you are 25 so that you have an adequate time of 10 years to save for your home.
1. Don’t buy a house when in debt
Buying a house when you are in debt isn’t a wise decision as you will be in critical financial problems. Going for a home loan will further weigh down your outstanding dues. It would be best if you wait for some time till you get rid of the repayment burden.
Still, if you are in urgent need of a home and staying on benefits but need a loan today direct lender, then you can have multiple options to choose from. You can opt for personal loans, short-term loans or even instalment loans.
Getting loans from direct lenders is beneficial in multiple ways. It may be like flexible interest rates, repayments or fewer obligations. So no need to be worried!
2. Better to buy a house that you can afford
Setting up a budget for your home is one of the essential things to do. Going beyond your affordability can put you in severe financial distress. It will increase your monthly instalment burden, but you will have to repay more because of higher interest and fees.
Thus, financial advisors recommend paying a minimum of 20% of the house price to avoid this expensive error.
3. Do consider the additional real estate costs
Paying off the value of the property isn’t the end of the story. Several additional costs need to be addressed while buying a house. These extra expenses include broker fees, legal charges, property taxes, moving expenses, home insurance, etc.
While planning to save up for your dream home, you must remember to address these. This pre-planning is essential —- it will protect your emergency funds from getting exhausted.
4. Cut down your expenses today to save for future
That you are planning to buy a house won’t increase your income. It will remain the same as before. So, how can you save with so many monthly expenses to handle? Well, there’s a more straightforward way to deal with it — evaluate and cut down your monthly expenses.
You can find multiple unnecessary bills and fees in your monthly expenses if you look at them thoroughly. Chopping them off your monthly list can help you save a lot of money, which you can transfer to emergency funds.
5. Take short-term loans instead in emergency
While saving up for your dream home, you should consider saving as an FD, which means it is not for use. Even in an emergency, opting for short-term loans that you can pay off easily is better. The most significant thing is that you can have small amounts like £1000 or even pound 10000 loans with bad credit.
These are short-term loans coming from direct lenders. It means a good credit rating is not essential to avail of this loan amount. Also, the tenure and interest rates are lower when it comes to short-term loans.
6. Review your recurring monthly plans
While reviewing your monthly expenditure, you must re-evaluate whether regular indulgences can be turned into once-in-a-month / once-in-a-week expenditures. Perhaps you can do that with your phone recharge plans or TV cable plans. How about stepping down into a less-costlier plan? Well, don’t be disheartened; you can always get back your plans later!
7. Keep your hands off shopping now
Shopping is a habit for most people, especially with everything available online. But you may not know that it stealthily consumes a considerable amount of money. If you can put a check on your habit of shopping around, you can actually save up a lot of money.
Especially stay away from more prominent brands that sell expensive products. Instead, go for local brands in the meanwhile. Once your savings reflect the cost of your dream house, you can resume your shopping and spending.
8. Stay aloof from dining out
Visiting restaurants for brunch or supper can exhaust a lot of your money that you may not even realise. So, put a stop to eating out or treating friends while you are saving up for your dream home.
If the home is the priority, then keep your heart away from the restaurant blinks and outdoor delicacies. How about preparing good food at home and calling your friends for dinner or a party? This way, you can enjoy the same bite but at minimal spending.
A den of your own is a privilege that you may have to strive for. Without pre-planning, it can be a daunting task overall.
Got your savings plan?
The faster you plan for savings, the quicker you can own a house of your own. Make your savings plan a realistic one that you can adapt and fulfil.
If there is any problem or disturbance in the savings, then you can explore borrowing options as well. We have already discussed a few options above that you may utilise.
Nevertheless, planning to stop your meal for a day is not a practical approach. Instead, it will make you weak or ill and affect your source of income. The idea is to cut down the unnecessary expenses and transfer those pounds into your savings account for homeownership.
Ailsa Adam is the Editor-in-Chief and former content head at Hugeloanlender. She has been a valuable member of the content strategy team since 2017 due to her abundant experience in the finance sector. Passionate about helping individuals navigate the world of loans and personal finance, she has dedicated herself to acquiring extensive knowledge on various financial products. Before her role at Hugeloanlender,
Ailsa worked as a seasoned journalist and writer, specialising in creating informative blogs and articles on diverse loan types. She is known for her meticulous research and commitment to delivering accurate and engaging content. She holds a degree in MBA Finance and has a keen interest in creative writing and art.