The journey to property ownerships begins with putting funds aside as savings to achieve your long term goal of home ownership. This can be achieved by opening a 1st HOP Account, a Crossover Savings Account or through purchase of a Housing Development Bond. It is advisable to begin saving early for home purchase since mortgage is a long term commitment that requires self-discipline.
The 1st Hop account is an excellent starting point for young people who want to develop the savings discipline. It enables you to save up to Sh.4,000 per month tax free. Also, interest on the account for amounts below Sh.3,000,000 does not attract tax. The account’s key advantage is that it builds deposits and its benefits accrue when you invest in a housing project.
The Crossover Savings Account offers you very attractive features that enable you to save for long term projects such as home ownership or any other dreams you have. These features include: earning high interest on the account deposits as well as loyalty points on every deposit, access to 100 per cent mortgage financing, up to 25 per cent discount on commitment fees, up to 2 per cent discount on mortgage interest when applying for a mortgage loan and much more.
The Housing Development Bond (HDB) on the other hand equally suits those who want to set aside money for putting up a home. The HDB requires a minimum of Sh.50,000 and offers a saving of 5 per cent on withholding tax. HDB gives you the flexibility of savings and withdrawal in case there is an urgent need for the money.
As your income grows, it is wise to put more money aside. The challenge with most of us is the culture of first spending then saving what remains.
