When you are thinking about investing in a new home, having a down payment is the first step a person can take to fulfill their dream. Although there are credits and government subsidies to have the initial installment, finance experts consider that having this, from your own savings or through unemployment, is the most recommended.
In this way your debt will be less, you will have greater facilities when acquiring a loan or a subsidy and you could avoid incurring a double obligation that can be difficult to sustain, thus putting your finances in danger.
In general, the initial payment was between 20% and 30% of the total value of the property, now with the announcement of Malagón, it will be possible to find loans that finance up to 90% of the property, leaving the initial payment of up to 10 %. Saving is a habit that is still difficult to achieve in a large part of Colombian households, so financial education on this issue has been a constant struggle on the part of financial entities and the State.
Recommendations on how to save for the down payment of your house :-
- The first thing to keep in mind when you go to buy a home is to be aware of your finances: how much you earn, how much you spend, how much you can save and how much you could borrow.
- After defining your finances, you must determine the monthly amount that you will allocate to save. To start saving, financial institutions recommend allocating a minimum of 10% of income for savings, which should increase little by little.
- For people who live with a partner and have children, it is considered that the ideal distribution should be 70% for expenses and 30% for savings. Even if your lifestyle allows it, you could set aside more surplus for savings.
- Face all your debts and keep your credit cards up to date.
- Avoid over-indebtedness. This is a classic and wise recommendation: do not spend more than you can. Know your budget limits and avoid using more credits until you have paid off the ones you have completely.
- Difference between a want and a need; this way you can avoid unnecessary purchases and allocate those resources to increase your savings.
- Take the time to research and choose the mortgage that best suits your needs. Compare prices and financing conditions in different entities before purchasing it. On a home purchase, which involves debt for a long period of time, a difference of one percentage point in credit can mean a big change in your final payment.
How to project monthly savings for home purchases?
Doing a proper planning of your finances and your home is the most important thing to take into account when you face the important decision to acquire a property. Ask and compare in various financial entities how much is the maximum amount that they lend you for mortgage credit, based on your income and risk profile. Take into account variables such as interest rates, inflation and the most convenient loan term.
This research will give you an idea of the range in which you should search for a real estate project. Once you have the value of the property you want to buy and the percentage of the down payment you need, start a savings plan. According to the financial education program Saber más, Ser más de Asobancaria, these are the six steps to project monthly savings.
Define your goal of savings necessary to buy a home. If the house is new, this is the value of the down payment or more. Giving a higher percentage than requested in the initial installment is a good option to reduce the level of indebtedness for the rest of the credit.
Plan the time in which you want to meet your goal in months.
Calculate how much you must save each month to achieve your goal, dividing your total savings goal by the months in which you want to achieve it.
Compare with your budget, to see if it is possible to make that saving or if you need more time to achieve it.