Owning a house is a dream come true for many Nigerians. Not only that, owning a house is widely considered as a significant investment. However, buying a house or even saving up for a down payment does not come easy to many people.
With the severe inflations, weak currency and harsh economic realities bombarding us regularly, owning a home can seem impossible.
How do you overcome these hurdles and raise money to pay for a down payment?
The truth is there are a couple of ways you can do that!
In this article, we’ll walk you through proven, practical steps that will help you raise money for a down payment. That way, you will be on the right path toward securing your dream home.
But first, let’s talk about what a down payment is all about.
A down payment in real estate, which can also referred to as an Initial Deposit, is a percentage of the property price that the buyer pays to secure it. The first part, called “Earnest Money,” is paid upfront, while the rest, known as the “Remainder,” is paid at later periods to complete the purchase.
The percentage of the down payment required to be paid by the buyer depends on the property seller and might incur an additional fee compared to making an outright payment.
Your down payment is a key part of buying a home. It affects how much you can afford, influences your interest rate, determines the types of loans available to you, and impacts your monthly payments.
How to raise money for your Down Payment
- Identify the Property you want
What kind of property are you looking to buy? Is it something you can afford in the long run?
For example, if you’re considering a property priced at 105 million Naira, the required down payment could be on the high side for you and may take a considerable amount of time to save up.
By carefully considering both the type of property and its cost, you can create a realistic budget to guide your purchase.
- Set A Purchase Budget and Timeline
After you have identified the kind of property you want and the required amount for the down payment. Next on the list is to put a budget system in place to determine how much is the total payment and how much you will be saving regularly.
A budget system helps you to remain disciplined and consistent about what goes into your down payment savings. This way you will be more focused on achieving your goals towards making a down payment.
- Utilize High-yield savings accounts or Apps.
Opening a high-yield savings account offers your savings more interest, making your money work for you while staying out of reach for impulse buys.
For example, using apps like Piggyvest, Opay and Cowryrise can you earn interest on your savings. Not only that, they can provide automated ways and disciplined options that will help you reach your saving goals faster.
- Cut Down Expenses
What are the things you may need to sacrifice to attain your saving goals faster?
For example, getting rid of expensive monthly subscriptions, membership, pricey rides or meal orders can help you reach your saving goal faster. Review your expenses and identify which ones need to be prioritized.
- Maximize your income
Often time it is difficult to save or raise money if you don’t have a multiple or viable source of income. Maximizing your income by having multiple sources of income can accelerate your saving process or help you raise money faster.
You can start a small business, do side gigs or seek a couple of ways you can make money online.
- Take Advantage of Loans and House Funding Schemes
Some commission banks and organizations offer quick and flexible loans. For example, the FMBN Federal Mortgage Bank of Nigeria provide housing loans and also offers programs like National Housing Fund (NHF) that allows contributors to save towards owning a house.
READ ALSO: A GUIDE TO UNDERSTANDING MORTGAGE RATES
In conclusion
Saving for a down payment requires discipline, creativity, and patience, but the reward is worth it!
By setting up a dedicated plan and incorporating some of these steps, you can make your dream of owning a home a reality sooner than you may have thought.
At Thinkmint Nigeria, we offer excellent and affordable properties with a flexible down payment system that would align with your budget. Be sure to check them out here.
A trial will convince you!