Whether you live in Colac, Warrnambool, Hamilton, Mount Gambier or Melbourne, home ownership is a major goal on many people’s lifetime, ‘To Do’ lists.
But it can’t happen without a deposit – and knowing how to save and get this together will get you on track to realise that home ownership dream.
So… where to start? It can seem so daunting when you look at it in its entirety – where or how to save that amount of money before you’ve even started seriously looking for a property.
We have a few suggestions about what you should consider to get yourself into the property game.
1. Take a good look at where you are financially
Start at the beginning – how are things currently looking for you, financially? What do you have to work with?
Knowing and understanding this is, without question, the place you need to start. From here, you will be able to set your budget, and work out your options.
To get a good picture of your current financial situation, you need to consider and scrutinise details such as:
- Do you have any current assets? And if so, what are they?
- What’s your income?
- Do you have any debts to consider?
- What are you living expenses? Be realistic, to ensure you have an accurate picture to begin with.
Once all this information is brought together, you will be able to either see how much you can save each month to put towards a deposit, OR what changes you need to make to make it easier to save for a deposit.
If you’re not sure about how to approach this, make sure you get in touch – we have plenty of experience helping our clients get their financial situation in good shape to save for a deposit.
2. Establish how much you can borrow
Once you know where you sit financially, we can help you work out how much you can borrow.
By the way, don’t just rely on the online borrowing calculators that you’ll find via a quick search – they’ll provide a more general, ballpark figure, but greater detail specific to your own situation – such as whether you can make the repayments once you’ve extracted your living expenses – won’t be included.
That’s where we can help. We can look at both aspects in context, to identify how much you can realistically afford.
From here, we can start talking about loan pre-approval, which means you have a set amount that you know you can spend (and afford to repay!).
3. Understand the total costs of purchasing a property (hint: it’s not just the repayments you need to be able to afford!)
Repayments on a loan are probably the biggest cost you’ll need to have a handle on.
But it’s important to know that there will also be additional fees and costs involved in any property purchase.
These can include (but may not be limited to) things such as:
- Mortgage insurance
- Legal fees (by the way, we can help you find a reliable conveyancer when you need it)
- Building fees
- Stamp duty (people are often caught by surprise when it comes to stamp duty)
- Home and contents insurance (vital!)
- Moving costs
- Rates
We have good knowledge on what these expenses might be, and what allowances to make. Reach out and we can make sure we keep you informed.
4. Have a realistic picture of how long it will take you to save what you need
Once you know how much you can put away each month (factoring in your living expenses and any other debt repayments), and we have established how much you’ll be able to borrow, we have a decent base to work out how long it will take for you to save for this essential deposit.
An easy way to work this out is to use the Federal Government’s savings goal calculator. This is a simple online tool that will help you calculate:
- A realistic time frame for reaching your savings target
- More steps about how you can reach your target
As already mentioned, we can also help in this regard – the more information you have at-hand, the better informed you will be.
5. Look into Government grants – are you eligible?
If you’re a first home buyer, then we need to be talking about Government grants you could qualify for. These include:
- The First Homeowner Grant
- The First Home Super Saver Scheme
- First Home Loan Deposit Scheme
- The Homebuilder Grant
Depending on your eligibility, you can get thousands of dollars worth of assistance that will help push you along that ‘saving for a home’ path. It’s too good an opportunity to overlook! Make sure you ask us what’s available, and whether you are eligible.
6. Consider other ways to save for a deposit
Make sure you are open to making some changes so that you have the capacity to save for a deposit. For example:
- Be open to the idea of cutting down on unnecessary spending
- Have you considered whether there’s a way you can generate a second income?
- Look at what you are paying in utilities (eg: power). Have you got a good deal? How can you improve it, so you are paying less each month?
- As hard as it may be… put off making any big purchases. Now is maybe not the time for that brand new European-badged car?!
7. Know that you don’t need to navigate this alone – we are here to help!
Even though this is the last tip, it’s perhaps the one to start with – reach out to your Mortgage Broker for help to get this ball rolling.
We offer years of experience that we know will help to get you on the path to home ownership – it might be easier than you think.
Get in touch today, to get started.
