As a first home buyer it may be a little daunting as to where to start so here are a few quick pointers for you.
You should also consider opening an online savings account, which often attracts a higher interest rate while being less accessible than a traditional bank account, so you are less tempted to make withdrawals. Arrange for part of your wages to be deposited directly into the account with each pay. Patience is required but, over time, your savings will grow into a healthy home deposit.
Crush credit card debt:
You are working with one hand tied behind your back if trying to save for a home deposit while carrying credit card debt. Switch to a low-interest credit card and pay off as much as you can afford each month. The quicker you clear your debt, the faster you can put those funds into your deposit.
Rent is another way to snuff out savings. While not everyone is in a position to do so, moving back to the family home can be a fast ticket to savings central! The simplest way to work out if a non-bank lender is right for you and your circumstances is to talk to your broker. Brokers act as a one-stop shop, with access to a wide range of lenders, including banks and non-banks, and hundreds of home loan products.
From little things:
If you require five or more years of savings to build a deposit, consider parking the funds in a term deposit account, where you are offered a higher interest return than a regular savings account in exchange for the use of your money for a set period. Minimum term deposit amounts can start at $1,000. While interest rates are fairly modest, it will take a number of years for your savings to sprout, but it’s a low risk investment option to consider. As with any investment decision, speak to a financial adviser before making any decisions.
Even the best laid plans can go astray. If you find your circumstances change, the real estate market jumps beyond your reach or life throws a curve ball at your savings, you might need to lower your expectations for your first property.
A new four bedroom, two bathroom home might be the perfect fit for your new family, but a three bedroom older property might be more within your budget, or you might have to look at a different location. You may also have to save for much longer than expected.
Don’t be disheartened, any plan should always be reviewed and adjusted to meet a changing real estate climate and your personal circumstances. Perseverance is often the key to saving for that first home. Speak to local agents in the area that you are looking to buy in and find out what trends they are seeing, and keep in touch with your broker to find out what new products are getting launched that may suit your situation.
If you don’t have a broker, feel free to call me on 0401326641 or email email@example.com and I’ll be happy to sit down and go through your options and help you set up your budget.