- Start Home-Planning Early To Reach Your Goal
- Invest Smartly In The Right Vehicles
- Don’t Underestimate Small Savings
- Aim For Long-Term Investment
Like most first-time buyers, you believe a house is a one-time investment. As a result, you worry you would have to strain more than necessary, financially, to spend on the ideal home of your dreams. Taking into account that buying a new home is possibly the single largest financial undertaking that most people make during their lifespan, let us look at some leading criteria, to help you prepare yourself financially for a new house.
Start Saving
To save up for a big goal such as house purchase, you need to look further into the distance. No long-term commitment can be fulfilled without changing a few habits. You may need to tweak some spending and saving patterns to make room for a large purchase, without compromising on your living.
Consider your current earnings to decide how much you can save from it. With this, you will be able to figure out whether the amount you save can serve your end-goal. If all fits well, you could start on a saving plan immediately.
Invest And Let Your Money Grow
You can invest your money and let it grow over time. For instance, let’s say you invest Rs 10,000 per month in a unit-linked insurance plan. With a modest rate of 8%, this is how your investment will grow over the next 10 years.
|
Year
|
Amount*
|
|
1
|
Rs 1.25 lakh
|
|
2
|
Rs 2.61 lakh
|
|
3
|
Rs 4.08 lakh
|
|
4
|
Rs 5.67 lakh
|
|
5
|
Rs 7.39 lakh
|
|
6
|
Rs 9.26 lakh
|
|
7
|
Rs 11.28 lakh
|
|
8
|
Rs 13.47 lakh
|
|
9
|
Rs 15.84 lakh
|
|
10
|
Rs 18.41 lakh
|
The longer you invest, the higher will be your returns. With a diligent investment habit, you may be able to save more than Rs. 18 lakh (refer to above table) if you invest for more than 20 years. If you are looking to save a larger amount in lesser time, you may want to look at equity funds or even the stock market.
Don’t Overlook Down Payment
If you plan to purchase your home on credit, like a home loan, consider down payments. A down payment on a house is usually around 15-20% of the total cost of an intended purchase. To save for this, you can start small. For example, with a ULIP policy, if you invest Rs. 5,000 for 20 years, you will be able to accumulate Rs. 28.45 lakh, assuming you receive a steady growth rate of 8% per annum.
Get yourself a health Insurance
Understandably, the most crucial element of investment is time. It can make a difference of lakhs of rupees. And while this is a good thing, it is an excellent reason why you should have a backup, through a health insurance policy.
To reach your end goal, your investment needs to stay intact. But, what if a medical emergency crops up? Instead of using your investment funds, allow your health insurance policy to play its role.
Conclusion
Buying a home is truly exciting and fulfilling. But there is a lot to know before you start looking.
Consider Unit-Linked Insurance Policy (ULIP) that offers life insurance and returns on your investment. Additional benefits can be added to it to enhance your protection, like critical illness cover.
Exide Life Insurance offers a wide range of ULIP plans that cater to various requirements. Explore our website for detailed information on the right plan for you.
