Many people will express that one of their major financial dreams is to purchase their own home. It seems that the desire for home ownership runs deep in their minds, hearts and souls, as owning an abode gives a sense of security that few other investments can provide.

However, despite the universal appeal of home ownership, a relatively small percentage of Jamaicans ever accomplish this worthwhile objective. Although the desire to buy a home remains firmly lodged on their wish list, too few are actually able to convert this dream into reality.

The elusive home dream

There are various reasons why home acquisition can be challenging for most Jamaicans. Firstly, the adverse economic situation precludes many consumers from being able to commit enough of their money to save for this goal. Every dollar that they earn is needed to meet basic expenses.

The high cost of housing is another factor that prevents many from accomplishing this dream. Inflation has taken the price of homes way out of the reach of the average consumer, and it can be difficult to secure affordable home financing which will fit into their budgets.

Some persons, who have saved enough for the deposit on a property and would qualify for a mortgage loan, find that there is intense competition for homes in their desired price bracket. It seems that there are not enough housing solutions being produced for middle-income earners.

However, a major reason why the home goal remains an unfulfilled wish for many people is that they fail to make concrete plans to accomplish their dreams. They don’t create a directional map or carry out the strategic steps that can help them to find their treasure.

Create a home ownership plan

Like any other financial dream, you must be clear about what you are trying to achieve on your home ownership quest. Don’t just say that you want to buy a home one day; state the preferred price and location of the property, and the time in which you would like to purchase it.

After writing down these specifics, create a vivid image of your goal by making a vision board with pictures of what your ideal home would look like. Cut photos from home magazines which depict your décor and gardening ideas, and keep this visual reminder where you can see it daily.

Once you have clarified your goal, you need to take a practical look at the costs of purchasing a home. If you don’t have a realistic expectation of what it’s going to take financially to accomplish your goal, you will not be able to make proper preparations to acquire the money you need.

List your home acquisition costs

Your first immediate cost would be the deposit, which is usually about ten to fifteen per cent of the selling price. You may also incur attorney’s fees, which include half the cost of the sales agreement, the drafting of the transfer documents as well as preparation of the closing documents.

When itemising your home purchase expenses, you also need to factor in the government taxes that apply to property transfers in Jamaica. These include stamp duty and registration fee; and if you are taking out a mortgage, there is another charge to register this transaction on the title.

If you require a mortgage loan to finance the balance of the purchase price, you will also need to secure the services of a surveyor and valuator to produce reports on the home you want to buy. You may also wish to have the property inspected for structural soundness.

It is advisable to shop around at various lending institutions to ascertain the mortgage amount that you can afford. Your salary, debts and other expenses will help the lender determine how much money you can borrow, and having a pre-approved limit can help the process to go smoother.

Prepare for recurrent home costs

One of the mistakes made by prospective home buyers is underestimating the true cost of owning a home. It’s not enough to think that you can cover the upfront and closing costs for the property purchase; you also have to consider all the additional expenses that you will face.

After you acquire your home, you may incur costs to physically relocate from your current abode. These may include buying new furniture and fixtures, delivering your belongings to the new place, and possible repairs and renovations to bring your new home up to your standard.

It is important to input the new home costs into your budget to see how these will impact your other bills. Apart from the mortgage payments, you may have monthly insurance costs, strata fees, maintenance or upkeep charges, and annual property tax to contend with.

To help you to plan effectively for home ownership, I have created a checklist of housing expenses which are relevant to Jamaica, as well a spreadsheet that calculates the costs associated with local property transactions. These tools can be downloaded at www.financiallysmart.org.

Copyright © 2013 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, October 10, 2013

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Cherryl is a money coach and business mentor, and founder of Financially S.M.A.R.T. Services. See more of her work at www.entrepreneursinjamaica.com and www.financiallysmart.org. Contact Cherryl