Have you got your sights set on the Australian dream… owning a home? Saving for the deposit is undoubtedly the hardest part. Can you ever climb out of the renting game? Yes, you can. Yes, you will. Saving is also made difficult by the increase in house prices, on top of your existing bills. But don’t be deterred.
Make your home-buying dreams a reality through these simple strategies.
Continue reading to learn more.
1. Work out what you can afford to borrow
The first step is to work out how much you can afford. Buying your first home is an emotional experience – it’s easy to be dazzled by properties out of your price range.
Instead, do the maths and house hunt with a property price you know you can afford. That might mean starting out in an apartment (which has a lot of upsides) to get into the market.
To work out what you can afford, draw up a “future” budget that includes mortgage repayments, insurance, rates, water, body corporate fees, maintenance and of course, all your other day-to-day expenses.
Now put the monthly mortgage repayment amount you calculated into an online mortgage calculator. This will tell you how much you can afford to borrow.
Top tip: Use the online calculator to adjust the interest rate to see what effect a rate rise will have on your ability to make repayments. Factor a 1% – 2% rate rise into your future budget so you don’t overborrow.
2. How much deposit do you need to save?
It might not be as much as you think.
Some lenders are prepared to offer loans on as little as a 5% deposit.
That’s good news for getting into the market sooner, but:
- A deposit of less than 20% will mean you have to pay mortgage insurance.
- Your job security, income, credit history, savings history and the property will affect how much of a deposit lenders require.
Of course, the bigger your deposit, the more you’ll save on interest. By borrowing less, your repayments will be lower and you’ll be in a better position to negotiate interest rates.
Which is why Lendlease’s First Place financing initiative can be a big help when you’re trying to get into the market.
With First Place by Lendlease, first home buyers will pay only a 5% deposit on any Melbourne Quarter or Victoria Harbour apartment and Lendlease will contribute the remaining 5% of your deposit. This isn’t a loan, but an initiative to help get first home buyers into the market sooner. Full T&C’s available on firstplace.com.au
3. Do you qualify for first home buyers grant?
If you are buying or building a new home, you may be eligible for the First Home Buyers Grant. Each state is different, so check your state’s website for the amount, eligibility and rules. In Victoria, for example, you may be eligible to receive up to $10,000 to help with the cost of buying your first home.
As a first home buyer, you may also be eligible for a stamp duty concession or exemption, which can save you thousands!
4. Reduce your living expenses
The more you can squirrel away, the faster your own home becomes a reality.
Your biggest expense is probably rent, so if you can cut your rental cost, you’ll save your deposit much faster.
Ways to reduce rent include:
- Move back into the family home
- Share with flatmates (this is what we did)
- Downgrade to a cheaper place
- Housesit
Do you have a new car with finance? Consider downgrading your car and putting the savings towards your deposit.
Finally, cut your discretionary expenses – stuff like clothing, eating out and entertainment.
Top-tip: Prioritise your savings and pay yourself first! Automatically transfer savings each payday to a high-interest savings account and then live off what’s left.
5. Save inside your super
An option that can help boost your savings is the Government’s new Super Saver Scheme. This scheme allows first home buyers to save within their superannuation fund meaning you can save faster with the concessional tax treatment within super. There are strict eligibility requirements and rules, so it’s a good idea to check with your financial advisor to see if this option is right for you.
6. Boost your deposit with extra earnings
Another option is to sell your clutter. We all have stuff hanging around taking up space. Sell it and put the extra cash towards your savings. Not only will it boost your deposit, it will also make moving into your new home easier when the time comes!
Owning your first home doesn’t have to be a pipe dream. To get into your first home faster combine tips: consider an apartment, get all the help you’re eligible for and cut living expenses to boost your savings and you’ll save a deposit faster than you thought possible.
How To Save For Your First House Deposit Click To TweetIf the unexpected occurs and you find yourself in need of a loan to tide you over till payday, get in contact with Quickle today. We may be able to help.
To apply, complete our quick and easy online application and send us your bank statement. Receive money in your account with our same day loans and microloans with manageable repayment options. For details, contact us.
See original source article here.
You can read more about same day loans in our previous blog post: Facts About Fast Loans
