Get your first installment out of the way.
Whether it’s for living or investment purposes, buying real estate is one of the most important decisions an individual can make in his or her life. It is common knowledge that the majority of buyers cannot afford to make a full payment for real estate in a single transaction. Thus, they turn to real estate financing paid in installments between 15 and 30 years.
In this respect, the Saudi Arabian Monetary Agency (SAMA) issued a mandate to lower the cost of the required first installment from 30 percent to 15 percent. This is one of the first steps that SAMA is taking toward alleviating the citizen’s acquisition of real estate financing, which in line aims to directly solve the housing crisis.
Engineer Hattan Tasji, Head of the Real Estate Investments Department at SEDCO Holding Group, said, “Implementing the initiative is in the pipeline and the goal is to approve about 85,000 applicants and finalize their mortgage loans with banks.”
Here are the six optimal ways to provide the first installment:
This step is one of the most difficult steps, yet it’s just as effective. Saving helps avoid loan costs or losses from the sale of some assets. On the other hand, it takes longer than any other alternative. It is necessary to provide a plan that illustrates the desired amount of savings one month at a time.
- Sell Assets
It might be considered wise to sell high value assets, such as gold, in order to pay for the first installment. This can help avoid debt or the time it would take to save.
- Give Up Leisure Time
While it may be difficult, giving up leisure investments, such as traveling, is a necessary sacrifice. It would be wise to save the money intended for a vacation and save it for the prospects of owning real estate.
- Borrow from Friends or Family
If the above steps cannot be applied, borrowing money from friends or family can be an option. Although it is considered a loan, it is an interest-free loan that does not require fees.
- Acquire a Loan from Work
Another option is to acquire a loan from your employing company and repay it by deducting monthly installments over a given period.
- Acquire Personal Financing
Acquiring personal financing to pay for the first installment is considered the least effective in terms of savings. However, personal financing can be important when there are no other opportunities to obtain from the previous steps. Subsequently, interest and fees will be applied.