Saving to buy a house. Where to start?

Few people can buy a home without having to ask for a mortgage from the bank and without making the effort to save time before being able to take the step of signing the deeds. Saving the money necessary to contribute the amount that the bank is not going to finance and to pay the expenses associated with the purchase may seem like a marathon, but the important thing is to start and know where to do it.

Buying a home requires having saved at least 30% or 35% of the sale amount of the house: 20% of the sale price that the bank does not finance and, at least, 10% or 15% more for the payment of the costs of the operation. Not forgetting that the greater the amount saved, the less money will be paid in interest because the lower the principal of the loan.

For start saving It is important to set a goal, or what is the same, to know how much money you will need to have saved for the bank to approve the granting of a mortgage. Thus, the first thing to do is to know how much can be allocated to the purchase of a home, depending on one’s own economic possibilities and the prices of the area where you want to buy.

Looking for a house can take time, and when we start saving we will not know what the home in which we are going to invest will be. But taking a look at the properties for sale in the area can give you an idea of ​​the average price of the houses. In fact, many real estate portals offer data on the average cost in each neighborhood.

From the moment you start saving for a home, it is important to be realistic. Depending on the prices in each area, it may be necessary to make concessions and prioritize those characteristics that are really needed in a property.

It is also advisable to take into account that the employment situation is susceptible to change, and that unforeseen events may arise that affect the economic situation, so it is better to rule out thinking of maximums in relation to the money that is expected to be you can save.

The first step, get rid of debt

It is difficult to set the goal of saving for the purchase of a house when you have to use part of the income to pay other previous debts. It can even be demotivating. As, in addition, the bank to which the mortgage is applied will not like the existence of other loans, a good first step is to get rid of previous debts and thus be able to start saving from scratch.

Already without other loans to face, and knowing the amount of money from which it will be necessary to have in the bank account, you can calculate how much you would need to save per year, or per month.

Spend less and earn more

From here, the theory to save is simple is to enter more or, at least, spend less. Analyzing personal finances is a necessary starting point to check in which aspects you can, right from the start, cut expenses.

Among the items in which money is spent each month, some will be immovable and others accessory. But even on those goods and services that cannot be dispensed with, savings can be achieved with some time and effort.

For starters, you can check your gas, electricity or phone bills. Adjusting the maximum power of the electrical contract to the actual consumption, dispensing with those services that are not used or looking for better deals in other companies can mean savings every month.

It is common that we also allocate money every month to digital platforms or subscriptions to other types of content or services, which will have to be considered if they are really necessary. In other semi-annual or annual expenses such as insurance, it is also possible to look for better offers that involve a lower outlay.

For some people, meals away from home are a work necessity; But there is always the option of preparing food at home or trying to cut back on something in restaurants and bars, also when it comes to leisure time.

Apart from these fixed expenses, analyzing how much money is spent on purchases, whether from the supermarket, clothing or any other kind, can make you rethink whether you really could not save on these expenses. Buying less or searching for better deals can be a struggle, but it will pay off. From here, each person and their circumstances set the limit of how far they can and want to go to reach the goal of saving the money needed to buy a house earlier.

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