How to buy an apartment if I earn the minimum wage? This is what an expert says

Make your dream come true! Buying your own home is the dream of many Peruvians, but for those who earn the minimum wagethis goal may seem unattainable. However, with good financial planning and taking advantage of government assistance programs, it is possible to make this dream a reality.

Below we present some effective strategies to save and acquire a departmentas well as information on how to benefit from a mortgage loan and the Techo Propio bonus, aimed at low-income families.

If I earn a minimum wage, how can I buy an apartment?

According to the specialist, “A good alternative to get an apartment earning a minimum wage is through a mortgage loan, specifically, from the Techo Propio program, which can finance a home for up to S/128,000 by granting you a bonus from the State of S/44,805. However, the person who wants to obtain the home would have to put down a down payment of 10% of the value, or around S/12,800.”

It is essential to follow a rigorous savings plan. Jorge Carrillo Acosta, a financial expert, recommends saving S/12,800 for the down payment. This can be achieved by allocating S/180 per month for five years and thus reaching the down payment on a home from one of the State programs.

How can I save up for a down payment on an apartment if I earn minimum wage?

Now, the question is how can I save these S/12,000 for the down payment on my home if I earn the minimum wage? In order to reach the S/12,000 first, someone who earns the minimum wage could save S/180 a month, which is more or less 17% of the minimum living wage in our country. That monthly amount for five years at an annual savings account rate of 5% —which today pays up to 7%— could reach this S/12,000. Even less, if you save S/177 for 5 years at that 5% annual rate, you could reach S/12,000 for the down payment, which would be added to the S/44,805 of the government bond. Then, you would subtract around S/63,195 to reach S/120,000. If that amount is financed at an 11% rate, the installment would be around S/600, which for the minimum wage represents 60%, which is excessive.

Another option is to start saving with the minimum wage, aiming to reach the initial installment and, within a period of 5 years, no longer earn the minimum wage, but can earn approximately S/2,000, which makes paying S/600 much more manageable, since it would represent 30% of the salary — a fairly reasonable amount — and it is precisely between 30 and 40% that is usually paid in these cases.

Savings strategies

• Set a monthly budget.- The first step to saving is to be clear about your income and expenses. Establishing a budget will allow you to identify in which areas you can reduce expenses and how much you can allocate to monthly savings. Prioritize your basic needs and eliminate unnecessary expenses.

• Open a savings account.- It is advisable to open a savings account exclusively for the purchase of your home. Deposit the money you have set aside for savings into this account each month and avoid using it for other purposes. This will help you keep your savings organized and in sight.

• Take advantage of additional income.- If you have the opportunity to earn additional income, whether through a second job, freelancing or some other entrepreneurial venture, allocate this income entirely to your housing savings fund. Every extra sol will bring you closer to your goal.

Mortgage credit

1. Requirements to obtain a mortgage loan.- To access a mortgage loan, it is important to meet certain basic requirements, such as having a fixed income and demonstrating payment capacity. In addition, many financial institutions require a clean credit history. Find out about the specific requirements of each bank and start preparing in advance.

2. Comparison of interest rates.- Interest rates vary between different financial institutions. It is essential to compare the options available in the market to find the lowest possible rate. A lower interest rate will translate into lower monthly payments and a lower total cost of credit.

3. Payment plan.– Create a payment plan that fits your financial capacity. Make sure that monthly payments do not exceed 30% of your income, to avoid over-indebtedness. Also consider the possibility of making advance payments when you have additional income, to reduce the payment time and total interest.

Own Roof Bonus

1. What is the Techo Propio bonus?– The Techo Propio bonus is a subsidy granted by the State to low-income families for the purchase, construction or improvement of a home. This bonus can be a great help for those who earn the minimum wage and want to buy their own home.

2. Requirements to access the bonus.- To access the Techo Propio bonus, it is necessary to meet certain requirements, such as not owning another property, not having previously received a state subsidy and belonging to a family group with a monthly income not exceeding certain established limits. Check the requirements and make sure you meet them before applying.

3. Application procedure.– The application process for the Techo Propio bonus includes registering for the program, submitting documents that prove your financial and family situation, and waiting for the evaluation and approval by the State. Stay informed about the calls and deadlines to apply on time.