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Saving to Buy a Home in 2024: Effective Strategies and Useful Tips

Saving to Buy a Home in 2024 Effective Strategies and Useful Tips - Saving to Buy a Home in 2024: Effective Strategies and Useful Tips

Saving to buy a home is usually the first step before even starting the search. Acquiring a home requires making a series of initial payments, and having an initial financial cushion is essential. Achieving this may seem like a long process, but some strategies help.

Take note of what to pay attention to and how to prepare to save what you need to buy the home you are looking for.

What to consider before purchasing a home

It'll be fundamental to know the real estate market and survey the prices in the area of interest to establish the amount we'll need to save. If they are affordable, there will be a starting point to set the initial amount necessary to meet the first expenses. If not, we'll look for alternatives: another area or another type of housing.

The second essential aspect is personal finances. On the one hand, we recommend calculating whether it's feasible to save enough in a reasonable time. On the other hand, it is advisable to determine how much you can or want to spend on the home. Actually, it is advisable not to dedicate more than 30 - 35% of the gross monthly income to financing the property.

How much do you have to save to buy an apartment?

We must not forget the following issues:

Banks only finance 80% of the appraised value of the property. Therefore, it is necessary to have 20% of the remaining sale price. Applying for a 100% mortgage would be another option, but you must meet some requirements.
• There are a series of associated expenses in every purchase:
VAT on new construction: 10% in general and 4% on officially protected or publicly promoted housing.
Property Transfer Tax: between 6% and 10%, depending on the autonomous community. It may be lower depending on the type of home.
Tax on Documented Legal Acts: between 0.5% and 1.5%, depending on the autonomous community.
Notary and registration expenses. Also, the real estate agency commission if professional services are requested.

All this adds up to expenses of around 30% - 35% of the home value. It would be the minimum amount we'll have to save to buy a home.

Tips that work to save money

Saving requires effort, but some small tips or tricks can help with the task:

Be realistic with the economic possibilities: aiming for an unaffordable home can generate frustration and the loss of good opportunities, apart from a lot of time.
Calculate net income and monthly expenses: it will allow you to know how much you can save each month.
Make small sacrifices: Knowing your expenses helps you determine which ones are non-essential and where you can save or cut back, for example, giving up daily coffee, unused monthly subscriptions, or unnecessary luxuries.
Create a budget: designing a tight monthly budget and specifying each item helps avoid excesses and compulsive purchases that become expensive in the long run. Setting limits on the card and comparing prices will also help.
Automate savings: open a specific account and order a certain amount to be automatically transferred monthly.
Pay off debts: this means saving on interest. Therefore, get rid of any remaining loans, mortgages included. Nevertheless, subrogation would be possible.

If you have already started saving to buy a home, offers you a great real estate offer. The home of your dreams is closer than ever.

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