June 01, 2016
Seeking professional borrowing advice, together with breaking down the saving process into steps, may see you owning your own property sooner than you think. As your local Mortgage Choice home loan expert, I’ll guide you through the whole process. Here are a few tips to consider:
1. Set a limit It’s a great idea to develop a savings plan with your goal in mind. Set a time limit (say, six months minimum) to help you determine your regular contributions to help you achieve your goal.
2. Establish a clever saving pattern. Create a budget tracking your expenses and train yourself to think about where money is going, while cutting down on expenditures such as using public transport instead of taxis or perhaps even living with family to save on rent. If you have a loan pre-approval and are still saving, save the difference between your rent/board (if applicable) and the mortgage repayment you’ll soon be committed to. This will help you get used to the reality of being a mortgage holder.
3. Start with a lump sum, if possible Saving is always easier if you have something to start with. You could achieve this by selling anything you don’t need, perhaps making it a fun experience by holding an auction or garage sale with friends. Keep in mind that you will need to show some genuine savings that have been accumulated over a period of at least three months.
4. Consider the different loan options available these days, there are a wide range of lenders and loans available to borrowers. I can help you research and compare hundreds of home loans to find the one that’s right for you. First home buyers take note: Some loans can be guaranteed by a family member (e.g. parent/s). These types of loans help you bridge the upfront expenses gap by providing additional security. So, you may be able to enter the market sooner than expected.
5. Factor in additional purchase costs. Remember it’s not just the property you will save for. Consider additional costs such as a solicitor, removalist and service connections.
6. Be aware of your other loans. Other debt, such as personal loans or credit cards will reduce the amount that you can borrow so it’s important to be aware of the implications of other debts.
7. Borrow within your means. Work out what monthly repayment you can really afford. Your property purchase should add to your happiness – not be a burden.
8. Consider buying outside of the area where you ‘ultimately’ want to live you probably have a good idea of where you want to live. If saving to buy in that area is a challenge, you may want to consider buying in a less developed or popular area in order to help you get a foothold in the market. Work hard to put a dent in the loan and together with capital growth, you could build equity in your first home, creating an opportunity for you to move into the suburb of you’re dreams a little further down the track.
9. Use equity from other properties. Subsequent home or investment property buyers can also use equity from other properties towards their next purchase. Alternatively, you could consolidate other loans with your new mortgage and lower your regular repayments. Keep in mind this strategy will stretch the total outstanding debts across your home loan term.
10. Protect yourself and your home. Your home will probably be your most valuable asset, as such, it’s important not to leave things to chance. You should consider a wide range of insurances to make sure both your property and your family are adequately protected. Building and contents insurance can protect you from a range of threats including loss through burglary or damage by fire, while income protection will help to cover your mortgage repayments, should the unexpected happen. These tips are just the start. As your home loan expert, I will guide you through each part of the home loan process, and take care of the legwork to find the right solution for your needs.
If you have any further questions, please don't hesitate to give our office a call.