Check out our top tips to be in your first home in just five years.
Good things come to those who wait, and taking a planned approach to your first home purchase means you'll have all your ducks in a row – and be financially better-placed, when the time comes to make an offer on a property.
Five years may sound like a long time but think of it as 60 months. And with plenty of plans to make the time is likely to fly. Let's take a closer look at the critical steps that should be part of your long range plan.
Choose your ideal location
Your choice of suburb will make a big difference to the price you pay for your first home. You may prefer a house and land package in a newly developed estate in the outer suburbs or an apartment closer to the city centre. The key is to weigh up all your options bearing in mind proximity to employment, likely capital growth prospects and of course, market values.
Set a savings target
Once you know where you'd prefer to buy your first home, you'll have an idea of likely purchase price you're facing. Yes, values are likely to rise over the next five years however today's prices will give you a ballpark figure to work towards.
Aim to save a deposit of 20 per cent to save on avoidable costs like lenders mortgage insurance and also enjoy the savings of a smaller loan, which means lower monthly repayments.
Remember to allow for purchase costs like stamp duty and legal fees when it comes to your savings target.
Know what you need to tuck away
Once you have a firm figure to work towards, use our Savings Target Calculator to see how much you need to save on a regular basis to reach your money goal over the next five years.
This is a great way to know exactly what you have to do to meet your savings goal. Taking a ‘she'll be right' approach to growing a first home deposit could see you take far longer to get into your first home.
Be sure to look for a high interest savings account to grow your deposit. Every bit extra takes you closer to your goal.
Follow a budget
A budget offers valuable pluses when you're saving for a first home. It will show areas where you can trim spending to meet your savings target and it also encourages sensible money management, which will stand you in good stead when it comes to living with your first home loan.
The key is to make your budget realistic. Drafting a budget that doesn't allow room for fun is almost guaranteed to see you toss in the towel at some point.
Become an expert
First home buyers often have only a limited idea of how the home buying process works, including what's involved with taking out and managing a home loan. Developing a 5-year plan gives you plenty of time to gain a thorough understanding of the process, and this can help you avoid costly mistakes.
There is a wealth of information available online to get you up to speed. You'll find the Mortgage Choice site is packed with useful tips and information.
Build a team of experts
As you draw closer to the end of your 5-year plan it is important to gather the team of experts needed to make your first home purchase a streamlined experience.
Among the experts you'll need are a solicitor or conveyancer to handle the legal issues associated with the purchase – including reviewing the contract of sale of any property you're interested in.
It pays to make contact with a reputable pest and building inspector to conduct any pre-purchase inspections of properties for sale.
For expert help choosing the right home loan, talk to your local Mortgage Choice broker. In fact, your Mortgage Choice home loan expert can also help with any questions you may have about the home purchase process so it pays to make contact at an early stage.