A home, while the ultimate adulting goal for many, can in our current climate feel unattainable. In fact, so many in the oft-mischaracterized millennial generation feel like they caught the short end of the stick when it comes to home ownership – having faced not one, but several crises that impacted the economy since coming of age. The truth is, many millennial’s life choices, including earning potential and employment was shaped by entering into adulthood and joining the workforce at the heights of an economic recession; only to once again be leveled by the impacts of a pandemic. Let’s face it – for too many, the need to just keep surviving has pushed our most meaningful goals farther and farther into the sidelines.
Still, there is hope. Despite what you may have come to believe about the possibility of one day reigning supreme over your own piece of the Rock, we are here to assure you that the decision to start planning for your home today, can pay off sooner that you think.
This takes us to what you are already thinking of – the Down Payment on a home. While this can feel too big a goal to reach, there are steps you can take to achieve it. Below, we share five things to consider as you begin your saving journey towards home ownership.
1. Know how much you need
In order to make a plan for your down payment, you will first need to determine what type of property you are interested in. Take a moment to review the VM Property Services website, so you can better understand your taste and where you see yourself eventually calling home.
A percentage of the cost of that dream home is what you will need for your down payment. Now, I know you are recoiling at the thought of that 20 per cent you have often heard about. However, the good news is the Jamaican government has reduced the taxes and fees needed for a vendor to advance the sale of a home. What this means is, you are now able to purchase your home with as little as a five per cent deposit and eight per cent for the closing costs.
You cannot hope to achieve your savings goal of making your down payment without a working knowledge of your finances. Take the time to assess your current spending habits over the last several months. Ensure you identify your priority areas – such as rent, utilities and loan repayment; as well as what you spend on entertainment, restaurants, meals etc. This will help you determine where you can reduce your expenses and what you need to continue to prioritize.
As part of this process, you can begin to consider how you can downsize – that is, to live below your means in some areas, in order to be able to save more towards your goal. This may mean only spending on what you need, moving into a less expensive apartment or changing how you plan meals.
3. Start a Saving Plan
Now, that you have clearly defined your budget, it is much easier to determine what you can afford to save each month to meet your goal. The next step is to find a savings plan that is best for saving towards a home. At VM Building Society, the iSave For Home account, can get you there with attractive interest rates and specialized solutions for you.
Check out or Savings Goal Calculator to help you achieve your Down Payment goals.
4. Reduce Your Debt
While you are planning to start saving earnestly towards your down payment, its best to pause now and consider whether you have debt that you need to manage. You may feel the pressure to focus more on the future and forget the past, but a bad credit report can have significant impact on your ability to access a mortgage when you are ready. It is therefore important to take the steps you need to be in good standing with any loans you already have, in order to prepare yourself for a mortgage.
5. Explore Additional Sources of Income
Now, it goes without saying, you can’t save what you don’t have. Its entirely possible, you earn enough from your current employment to meet your goal within a desirable time. Some persons, however, may need to reconsider their employment situation to earn more or may need to explore additional sources of income. Think about your talents, your skills and your experience as you explore ways you may be able to earn some extra cash towards your savings goal.
In essence, the first rung of the ladder to home ownership is an understanding of what the goal entails and making the steps to achieve that. It has been an attainable goal for many – even Millennials – and can be for you too, with the right motivation and discipline. Once you have determined what your down payment cost will be, you can then do what it takes to achieve it. At VM Group, we have all the tools you need to achieve this goal – through saving, investing, finding a property and acquiring your mortgage.
Visit our Mortgage Centre to learn more about the process of getting pre-approved for a mortgage.