Purchase your own home for less

One of the most desired financial goals is to stop paying rent and have a home to call your own, but the costs involved usually make the dream seem out of reach.

Nevertheless, like any other financial goal, owning a home is achievable as long as you get deliberate about it and work towards making it a reality.

Obviously, this falls under long-term goals, which take some years and a substantial amount of money to achieve. Here are some things to consider if you want to start taking the steps that will lead you to the door of your own home.

COST

The cost of a home is a big obstacle for many people, but that should not deter you. Start looking around and get acquainted with the costs involved, whether by building or buying a ready-made home.

This will give you a sense of the kind of money you can expect to use to reach your goal. Be honest with yourself about what you can reasonably accomplish based on your income and remember that home ownership sometimes comes with huge sacrifices and cutbacks on non-essentials.

If you can find additional sources of income that you can channel directly to your home ownership goal, that might help you get to it faster.

You can also start saving for home ownership, because whether you are building or buying, you will need some money upfront to help you start or to pay upfront costs like the deposit, stamp duty, legal and other fees, in the case of a mortgage.

Savings towards home ownership in a registered home ownership savings plan are tax exempt (with limits of course).

Before settling on a place, compare prices in different locations and make sure the social amenities you need (such as hospitals, schools) are in close proximity. You can also find low-cost housing projects by looking around.

BUILD OR BUY?

Building your own home tends to be cheaper than buying a completed home. Buying a built house in cash is also cheaper than buying in instalments. The most expensive option is taking up a mortgage (home loan) to finance your home ownership dream.

The costs of a mortgage can be up to double the costs of the other payment options. You can choose your path to home ownership depending on your budget and what you can afford to commit to that goal.

DUE DILIGENCE

Whether you are building or buying, you will need to do your due diligence to avoid falling prey to scammers. Tap into the expertise of a surveyor, lawyer and other professionals who can help you confirm that you are buying a genuine property.

When buying a ready house, have an architect assess it for you. Visit the site. Confirm what you are paying for and find out the history of the property.

Don’t be afraid of asking questions; don’t be conned because you trusted too much. Make sure that the environment is suitable in terms of waste management, availability of energy/electricity and accessibility. Look around for potential houses during the rainy season to find out how they hold up to the rainy weather in terms of flooding and accessibility.

Felista Wangari runs the 52-Weeks Savings Challenge group on Facebook.