Buying a home can be a costly affair. Sometimes you look at the price tag and it puts you off completely. What most people do not know, is you don’t have to have the full amount to buy a house. There are several options. Here are a few of them:

• Mortgages

A mortgage is a loan specifically used for the purchase of buildings, often residential property. Mortgages are attractive because repayments are made monthly, hence easy to budget for. Additionally, interest tends to be lower than many other forms of borrowing because the loan is secured against your property.

The downside of getting a mortgage is having to pay a large deposit, usually 20%-30% of the value of the property. Furthermore, if you fail to honour the payments you could lose your property.

• Loans

Loans can be obtained from banks, SACCOs and micro-finance institutions. They help you to obtain a large amount of money quickly and repay in installments.

However, you must have collateral, default in payment could attract a lawsuit and loans are expensive.

• Buying Off Plan

Many developers offer the option to buy property before as it is being built. You could pay in installments or in full. Furthermore, you will probably get the home at a discount and can benefit from potential capital gains. A good example is The Alma project, where early investors have achieved up to 55% in capital appreciation.

• Crowd Funding

Buying a home does not have to be a one person responsibility. You could get a few individuals to come together and pool their resources. Chamas and other local social groups are your best bet. They offer an alternative for those who cannot access loans.

On the other hand, you would have to return money to potential investors if the target amount isn’t reached. Worse still, failed projects risk damage to the reputation of the group.