When buying a home, securing the down payment is usually one of the biggest obstacles that most Filipinos face. Sure, you can acquire a home with minimal or zero down payment, but that only increases the amount you need to pay monthly and in the long run, not to mention the length of the loan term you will get.
Before you look for pre-selling houses in Cavite or other places, here are some ways to save up for a down payment:
1. Minimize debt
One of the first things that a lender or bank will look at is your current debts. If you have a lot of financial liabilities in the form of debt (e.g. car loan, business loan, personal loan, etc.), they may not be too keen to let you borrow money. Hence, you may not get the house you want or may have to pay a larger amount to secure a loan.
If you’re thinking of buying a house soon, minimize debt as much as you can. This way, you can set aside more of your income for a sizeable down payment.
2. Be smart about your money
Saving up for a down payment will require a lot of sacrifices, especially if you are raising a family at the same time. If you’re really set on buying a house, you must be willing to improve your spending habits by doing the following practices, for example:
- Stick to your budget.Even if you’re not planning to buy a house yet, it’s good practice to set a budget for yourself and learn how to stick to it every month. Make sure to factor in your savings (for the down payment) when you create your budget, and deposit the amount right away in a separate savings account.
- Set aside wants for now.Focus on saving up money for a down payment and think about your future every time you want to buy something that you don’t need. That new gadget, jewelry, or designer bag can wait for now.
- Make adjustments.Whenever you can, make adjustments to your lifestyle in order to save more money. For example, if you spend too much money on eating out, minimize your restaurant dates to only once or twice a month.
3. Find other sources of income
If you have a full-time job, you can still find other streams of income to bulk up your down payment savings. Use your talents and skills. For example, if you are a good baker, try selling baked goods online or in the office. Or if you’re a talented musician, offer your services to weddings or debut parties. You can also consider starting a business with low investment, such as an online shop or a small food stall.
4. Set up separate accounts
Open a separate bank account for your down payment savings and don’t touch this account unless it’s for an emergency. Transfer your monthly savings into this account and consider it as a mandatory “bill.” This way, you’re training yourself to be obligated to save money every month, instead of treating it as an afterthought.
Owning a house is every Filipino’s dream. But if you don’t have enough savings yet, following these tips is a good start.
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