Buying a home is a dream that many of you would have nurtured for long. Some of you may have set your eyes on a peaceful condo in the suburbs. On the other hand, the city-lovers would prefer something where all the action happens. Irrespective of what you choose, buying a house is going to be an expensive deal. Some of you may even have to put your life’s savings to buy the house of your dreams. However, having your own place is worth all the trouble.

Even if you are not planning to buy a house shortly, you need to start saving for the hefty down-payment. Investing small amounts into the stock market is not a good idea to reach there. Instead, you need a multi-pronged to make every penny count.

Here are the tips you can follow to get about it.

Know your budget

The very first step, even before you start looking for a house, is to decide your budget. When you sit down to do the calculations, you may think that the EMIs are going to be much lesser than your rent. However, there are a lot of hidden costs like maintenance, taxes, etc. that can impact this figure. It is advisable to be realistic so that you don’t over-burden yourself and regret the decision later on. Experts say that your house expenses must not exceed 28% of your monthly salary. You can work backward with this figure to arrive at your budget.

Decide the kind of house you want

If you are into DIY and would like to give personal touches, you can opt for a fixer-upper. It will not only cost you less but you can also move in earlier and work on it gradually. If you are on the other end of the spectrum, you can opt for a condo which will have all the facilities. You would, however, have to pay for the common areas and services.

Find a local real estate agent

Several buyers try to find homes on their own. However, this can hurt you more than doing you any good. Firstly, real estate agents charge the sellers and not the buyers. Secondly, they will try to negotiate on your behalf to get you the best deal. Lastly, they know a lot more about contracts and legalities than you can imagine.

Manage the down payment

Certain first time home buyer programs will allow you to buy a house with no down payment. However, it is advisable to pay at least 20% upfront. It may seem daunting to save this amount but it can give you umpteen benefits. You will become eligible for a mortgage and get a lower interest rate. You will have more equity in your home from the start and will have a lower monthly burden.

Improve your credit score

If there is one thing that can substantially reduce your monthly outgo, it is this. You can get cheaper loans if you have a good credit score. A good credit history indicates that the bank’s money is going into safe hands. On the contrary, a dissatisfactory credit score could lead to rejection of your loan application. To improve your credit score, the first step is to clear any outstanding dues. In case of any disputes, try to negotiate with the lenders. Pay your credit card bills and other EMIs regularly and within the deadlines. It is also suggested to avoid fresh credit applications for at least six months before you apply for a home loan.

Save more money

I am not asking you to drastically change your lifestyle. Instead, there are simple ways of saving money. For instance, try to buy your groceries in bulk to avail attractive discounts. You can also try to reduce your take-outs and opt for more home-made meals. Opt for retirement saving funds to secure your future.

Apply for the right home loan

There are several loan programs that you can qualify for. Some of them may not require any mortgage insurance or a very small percentage of it. It is suggested to inquire about all the options before finalizing your home loan.