Planning to buy home? These tips will help you save fast for down-payment!

Buying a home is a dream for many! But, it is also a challenge for most. The increased aspirations and better standard of living have led to more Indians buying or aspiring for bigger and improved homes. According to a report by Housing.com and Makaan.com released in June this year, the average unit size demand across major cities has increased by 4 per cent to 1,300 sq ft in the last one year. "Indians are looking for homes that are 1,300 sq. ft, up by 4 per cent in January-March 2018 in comparison to January-March 2017," the report said.

The study was conducted in major Indian cities like Mumbai, Kolkata, Chennai, Delhi, Bangalore, Hyderabad, Noida, Gurugram, Greater Noida and Pune. The growing trend in the Indian real estate sector also comes from the rise of salaried and well educated homebuyers. 

However, every dream comes at a cost. And, homes are no different. According to a report published by Anarock, Kolkata is the most affordable among metros with the current average realty price at around Rs 4,405 sq ft. The same cost goes up to Rs 10,500 sq ft in Mumbai, making it difficult to find their ideal home at an affordable price. 

This leaves most buyers with no other option but to opt for a home loan. But, in this case they end up paying a huge amount as interest. The smart way to reduce that is by arranging a decent amount as down-payment which helps bring down the loan amount. Jitendra Solanki, Founder, JS Financial Advisors believes that everyone should plan for more of down-payment and less of loan. 

Here are a few tips that can help homebuyers to save fast for down-payment -

1. Plan early

Most homebuyers are young when they are purchasing their first home and often delay the decision. This leaves them with very little to no time to save the amount. However, if the decision is taken early, the buyers can do better financial planning and arrange the down-payment amount. 

"Start saving as early as possible. Generally, people decided only two to three years before buying the house. In this case, they are not left with much time to grow their money. All they have is their savings which they have to use while making the purchase. The interested buyers should have a goal right from the start," Solanki told Zee Business Online. 

2. Invest aggressively

Once the goal is set, the next step is to arrange the amount for purchasing the house. This cannot be achieved by just saving money. The focus should always be on growing the value of money by investing in various tools. This also helps customers to adjust the value of their money to inflation. 

Solanki said that youngsters should start saving for the house as early as they start their careers. "Start investing in mutual funds. The more time you will give to accumulate money for down-payment, the higher corpus you can accumulate," he added. 

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3. Aim for equities

While there are many investment options fixed deposits, stock markets, post office schemes, etc, Solanki believes that people should aim for equities. "People should be investing in equity mutual funds. For this, they need to give a longer horizon. But, even though they are planning to invest for five to six years, it is better to invest in equity mutual funds or balanced advantage funds instead of putting the money in a savings bank account. It will give them better return for the money invested than a savings bank account," he said. 

4. Wait for the right moment

The most important part is to wait for the right moment to make the purchase. The buyers need to understand that their expenses don't end with just paying the down-payment. They will also have to pay for extra facilities related to the property and soon, will have to pay the EMIs for the loan opted. So, they should allow their salary to grow to a point where they can afford these monthly installments. Also, it would be better if they pay off any already existing loans. 

Remember, even while paying off the loan, the buyer should be able to save a decent part of the salary. This amount may come handy at times of crisis.