How to save money for your down-payment for Home Loan

By: RAVI HARI, Senior Writer

Homebuyers need to pay approximately 20% of the purchase price. A 20% down payment is a sign that you are committed to the lender on a loan that you would avail of.

The down payment is deducted from the total purchase price of your home. Your loan will cover the rest of the price of the home.

To increase your income so that you can save money towards a down-payment for Home Loan, you need to make some sacrifices. The process takes a lot of time and could be stressful at times, but if the effort is made to purchase a dream home for oneself, sacrifices are worth it.

Here are a few useful tips on how to save your money for a down payment:

• Minimize your debts
• Spend money only on things that are necessary for you
• Do not spend money on non-essential things
• Do not indulge in impulse buying
• Put an end to splurging since at the end of the month you need to improve your savings
• If by credit card, you are paying more for your essentials, cut down on it and resort to payment by cash. (because default on card payment will attract interest)
• Consider using public transport if you need to commute to work. (You can save money spent on gas, parking, toll, if you avoid going to work on bike or car. Avoiding this particular means of transport is one of the best money-saving options)
• Buy cheaper version of goods and avoid buying branded items
• Rent out a portion of your house or your garage if you have enough space for yourself. This is extra income that you can gain
• Sell off the goods and articles that you are not using anymore
• Shop at stores that offer discounts. Buy goods that are on special discounted rates
• Only buy things that have a retain value
• Move to a place where rents are less
• Involve all members of your house in the saving process as deposits would increase quickly
• Do not accumulate debt. Say good bye to interest payments
• Keep a tab on entertainment costs. Eating out and going to a theatre for a movie involve huge expenses.