Saving for a deposit and securing your first home loan can be daunting tasks for younger folk. However, the earlier you start readying yourself, the easier the task will be; begin preparing just months before and you’re guaranteed to struggle.
Many Australians from Tassie to Darwin may be saving for a deposit as you read this. In fact, according to MoneySmart, over 48 per cent of Aussie savers are hoarding pennies for a chance to own their very first abode. So if you’d like to join them, break the task down into manageable segments and get started with these handy tips.
The sooner you start saving, the earlier you’ll become that champagne popping, first home buying individual you aspire to. All this requires is continually putting away 15-20 per cent of each paycheck.
Let’s say you put away $150 a week, that’s over $7,500 a year. According to the Australian Bureau of Statistics, the mean house price in Australia is $612,000 and as a first home buyer you’ll presumably be buying something close to half that value. Assuming the amount is around $350,000, a standard 20 per cent deposit should take less than 10 years to save. Of course, you can easily save more and make this happen even sooner, but the most important thing is to start now. While this may seem obvious, MoneySmart also revealed that 43 per cent of Australians do not save at all – don’t be in this 43.
Saving is grand in all its forms, but planned goal-driven saving is to house buying what Jonathan Thurston is to winning NRL premierships.
First, you need to know how much you can borrow, so you should speak to us – your local broker – who has the experience to help with this. You will then be able to figure out how much you need by researching property prices in your area and deciding on something realistic. Lastly, you need to plan out each step weekly, monthly and yearly, until you have a clear idea of where you’re going and how you’re getting there.
Free money! The Australian government has acknowledged that buying a first home can be a marathon and shortened the distance just a bit. Grant amounts and conditions are different state to state, but can be up to $20,000 and should go a long way towards helping secure your first property.
Now that you’ve saved a deposit and sorted your first home grant, it’s time to start property hunting and looking at home loan comparisons to find the best one for you.