Saving For A House? Here’s Why You Should Start Now

Saving for a House | Camella

Are you dreaming of having your own house but unsure of where to start? Well, the first step is to start saving for a home purchase. As a potential home buyer, building your funds for a down payment is crucial, and the earlier you start, the better.

In this article, we will discuss why it is essential to start saving for a house and the benefits that come with homeownership. Whether you are a first-time buyer or looking to upgrade your current living situation, here are the reasons why it is a great idea to save now.

Why save money for a house now?

There are several factors, such as time and interest rates, that influence how we save. In the context of saving for your future house, below are the considerations.

Appreciating property prices over time

Housing prices in the Philippines have been known to increase over time. By starting to save for a house now, you can better prepare for property value appreciation and other future costs.

Saving for down payment lowers loan balance

Suppose you are planning to take out a mortgage loan to purchase your house. In that case, saving for a down payment can help you lower your loan balance. As a result, this will also save you money over the life of the loan.

In short, saving now means you save money and make it easier to pay off your monthly dues in the future.

Building equity

Saving and eventually owning a house allows you to build equity over time. Each of your regular mortgage payments is essentially an investment in your future. Furthermore, they make up a valuable asset that you can later use for other purposes.

Bringing financial stability

Owning a house can be your first step towards financial stability for you and your family. Additionally, the fixed monthly payment for your house can better help you plan your future expenses and budget.

Paying off debts

When saving for a house, you might find yourself motivated to pay off all your debts. This includes your credit card balances and other loans. By doing this, you increase your chances of qualifying for better loan options, whether it is a conventional loan or a government program loan.

Building retirement savings

Homeownership is also a great way to build your retirement savings. The mortgage payments you make essentially build your equity. As a result, you create a valuable asset that you can sell or rent out in the future.

Reducing living expenses

Saving for a house early encourages you to cut down unnecessary expenses and plan your fun money smarter.

Creating a dedicated savings account

Do you have multiple savings accounts? It is time you dedicate one of those to save for your down payment. A high-yield savings account can offer better interest rates and help you reach your savings goals faster.

Overall, starting to save for a house now can provide numerous financial benefits, including increased stability and building long-term assets.

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How do I start saving for a house?

Now that you know the why, it is time to talk about how you can actually start saving for a house. If this is your first time, here are a few ideas for building your savings.

Set a down payment a goal

Determine how much money you need to save for a down payment on your dream house. In the Philippines, the usual down payment percentage that most lenders require for buying a house ranges between 10% to 20% of the home’s purchase price or total contract price.

In other cases, you may also need private mortgage insurance or mortgage redemption insurance (MRI). This protects your family and repays the outstanding loan balance in worst-case scenarios, such as the death of the borrower.

However, some developers may require a higher down payment of up to 30% of the property’s purchase price. The down payment is one of the biggest hurdles for most Filipinos when buying a house.

Once you know all the things you need to pay for, you can start setting a realistic timeline. This way, you know if you need to save for a few months or a few years.

Have a separate account

Motivate yourself to save by opening a high-yield savings account and assign it as your down payment fund. Doing so will help you track your progress more effectively. In addition, this helps you avoid dipping into the money for other expenses.

Furthermore, you can also set up automatic transfers from your checking account to your down payment fund monthly. Even if it is a small amount, it will eventually accrue and help you in the long run.

Cut unnecessary spending

Look for ways to save money on your monthly expenses. For example, explore how you can reduce big-ticket utility bills. You may also cut down your budget for eating out and limit your extra spending money. Instead, redirect those savings toward your down payment fund.

Consider a side hustle

Suppose you cannot sacrifice any portion of your regular monthly expenses. In that case, you would want to look for ways to earn extra income outside of your regular job.

Consider a side hustle or selling items you no longer need on Facebook Marketplace for extra money. You can then put this extra cash towards your down payment fund.

Pre selling condo in Davao at Camella Manors Frontera
Pre selling condo in Davao at Camella Manors Frontera

Pay off your debts

Before you buy a house, try to pay off your debts first. This does not mean that you have to settle all your debt obligations. However, you would want to reduce your debt-to-income ratio.

You can do this by paying off auto loans, credit card debt, and other burdensome debts. With this, you improve your chances of a home loan approval and may also help you qualify for lower interest rates.

Explore loan options

Research different loan options, such as bank loans, Pag-IBIG housing loans, and more. Each loan option has different requirements for down payments and loan balances. Understanding your best track forward will help you decide how to save efficiently for a house.

Consider investment accounts

Consider investing some of your savings in an investment account, such as a mutual fund or index fund. However, this is riskier than a savings account.

On the bright side, it may help you earn more money for your down payment in the long run.

Save for closing costs and other expenses

Aside from the down payment, you will also need to build a payment savings fund for other expenses. This is where you will draw when you need to spend money on closing costs and moving expenses.

Have patience

Saving tens of thousands of pesos for down payment money takes time and discipline. Do not get discouraged if you do not see results right away.

With patience and persistence, you can save enough money to buy a house on your own time and terms.

Move into your dream home in Camella.

Choose the standard for a dream home in the Philippines. Find the perfect fruit of your hard work and savings in Camella’s house and lot communities and vertical villages.

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