Krabi Hot Talk

9 tips for money management, ensuring a smooth process before buying a house.

Buying a house requires careful planning, especially finances and budget, because this will determine whether you can afford your dream home. Therefore, long-term money management and planning are necessary for people who prepare to buy a house, ensuring a smooth homeownership process, particularly considering the numerous expenses involved in buying a house.

In this article, Krabi Land and House will recommend 9 money management techniques for everyone preparing to buy houses in Thailand to ensure a smooth home buying experience, turning debt into an asset of happiness. What are these techniques? Let's find out!

Save before spending

A great method for people with a fixed income. When you receive your salary, separate it into a different account to prevent yourself from spending and forgetting to save. Saving small amounts at a time and consistently, this accumulated savings will definitely make a dream of buying a house come true.

Set a savings goal

Good money management involves setting savings goals to create a challenge and make saving fun. For example, the first month could be saving 50-baht banknotes, the second month 100-baht banknotes, until you reach your goal. This will make a plan of buying a house enjoyable and less boring.

Save up for a 20% down payment

If you already have a house in Thailand in your mind, setting a goal to prepare for buying a house becomes easier. You should aim to save a 20% down payment on the house price. This will help you pay less interest and pay off your mortgage faster. Plus, having savings will make it easier to get your loan approved.

Reduce unnecessary expenses

Sometimes you might find yourself impulsively buying something while browsing on your phone, only to find your house overflowing with parcels. Therefore, if buying a house is your future plan, think before spending to reduce unnecessary expenses. Remember, there are many more hidden costs associated with buying a house!

Reduce debt as much as possible

Reducing debt as much as possible is important for money management, because debt is a key indicator banks will use to determine if your home loan will be approved. Therefore, before buying a house, you should clear all debts at least 3-6 months beforehand, especially outstanding mortgages, which should be paid off before applying for a loan.

Build a good credit history

Creating a strong financial history, resulting in a positive credit score, gives you an advantage when applying for loans to buy houses in Thailand. This involves maintaining a consistent balance in your account, making regular deposits, and most importantly, paying debts on time and avoiding defaults. These steps will make the process of buying a house easier.

Estimate ability to pay the mortgage

Well prepared for money management and have enough money for a down payment? Don't forget to estimate your ability to make monthly payments! This prevents stress in your lifestyle and ensures that buying a house doesn't become a burden rather than a happiness. Therefore, if you feel that houses in Thailand you want is too expensive, you might consider a lower price.

Have an emergency savings

Another important money management technique is to have an emergency saving because banks may not approve the full loan amount, and there are many other expenses involved in buying a house, such as reservation fees, contract fees, home inspection fees, transfer of ownership fees, fire insurance, etc. An emergency savings will help you prepare for buying a house more securely.

Studying interest rates and refinancing

Studying interest rates helps compare loan promotions from different banks during the preparation of buying a house. It simplifies the decision-making process by identifying which bank offers the lowest interest rate. Refinancing after the first three years also simplifies money management, as lower interest rates lead to a higher proportion of principal payments in monthly installments for houses in Thailand.

These are 9 money management techniques for buying a house to ensure a smooth and hassle-free path to owning your dream home. And if you're looking for a house, townhome, or pool villa in Krabi, let Krabi Land and House be your consultant and guide you from the buying and selling process to after-sales service!