Just like all creatures under the sky, humans also aspire to own a home of their own one day. Owning a home brings feelings of emotional fulfilment as well as pride. It’s more than just mortar and bricks, as it also means financial stability for the family. However, owning a home needs strategic planning, right from early on in your career. Here are a few ways to plan early on saving money for your dream home:

Simple Math

You should know the type of home you want to buy – whether a villa, apartment of villament. Then factor in inflation on its current value as well as additional costs such as stamp duty and registration charges. This will help you calculate the target sum needed to buy your home.

Create a Corpus

You can multiply your hard-earned money in several ways. The most common of these is through recurring fixed deposit scheme offered by most banks, but these only give returns of around 7% (which are taxable too). Mutual funds are another way out and though they are subject to market risks, they do provide great returns. If you are looking for safer high-returns schemes that give tax benefits too, then consider investing in Equity funds. Their only drawback is that they generally have lock-in periods. Other ways to multiply your funds include Post office schemes, systemic investment planning (SIP) and Provident funds. You should ideally invest in a fund that gives higher rates of returns than the rate of inflation.

When to Buy

The earlier you can buy a home, the better it is. The plan should be to start saving as much as you can and from as early on as you can. If you start saving from around the age of 25 years, then in 10 years time, you would have built a corpus to comfortably pay off the mandatory 20% down-payment towards your home.
Home loan: Since most people take home loans to pay off the substantial sum required to buy a home, go for loans where you are comfortable paying the EMIs. You should ideally go for longer-term loans as the rate of interest paid to the bank would be less than the returns you make on your investments.

Emergency Fund

The emergency fund should always be available for unpredictable situations in life and should be separate from the funds being saved for your future home.

For those shopping for homes, take a look at the innovatively-designed apartments and villas by Favourite Homes.