How to make your dream of owning a home a reality

Buying a home is a goal many Australians aspire to, but it is one that seems increasingly difficult to achieve.

First home buyers face various financial challenges such as strong price growth in the capital cities and saving a sufficient deposit.

On top of that, lenders have tightened their policies in recent months, which makes home ownership that much harder.

However, if you’re serious about getting onto the property ladder, you can definitely make this a reality with careful planning.

Find out how much you can afford to borrow

A good starting point is to find out how much you can borrow as this will be a helpful indicator of what you can afford to buy.

You can do this easily by using Mortgage Choice’s online calculator which will estimate your borrowing power based on your income and expenses.

Work out how much of a deposit you need

Once you have a price indication, you can work out how much of a deposit you will need, taking into consideration your current savings.

As a general rule, you should have five per cent to 10 per cent of the purchase price for a deposit.

You will likely pay Lenders Mortgage Insurance if you have less than 20 per cent of the purchase price, but it can help you get into the property market sooner rather than later.

Be a diligent saver

 You can boost your savings with some simple tips:

  • Set up a budget that lets you monitor your expenses and income. Make sure you record everything as it will help you work out areas for saving.
  • Cut back on expenses that you no longer need such as unused subscriptions and memberships.
  • Shop around for better deals that allow you to save more money.
  • Open a high-interest savings account and regularly contribute a portion of your salary towards it.
  • Pay off any debts such as credit cards and personal loans as this will increase your borrowing power.

Be aware of the hidden costs of buying a home

When you buy property, there are several hidden costs that can easily be overlooked.

These include stamp duty, loan application fees, pest and building inspection costs, conveyancing and legal fees.

In addition, there are the costs associated with moving homes such as removalists and setting up your utilities and internet.

Take advantage of concessions

As a first home buyer, you can take advantage of concessions and grants that will help alleviate the financial pressures of purchasing a property.

These will vary depending on the state you live in and range from grants for the purchase of new homes to stamp duty exemptions.

You may also want to consider the Federal Government’s First Home Super Saver Scheme, which lets you make extra contributions to your super account and this can be used for a home deposit.

At Mortgage Choice, we want to make your journey to home ownership a seamless process. We can assist you with taking out a mortgage and answer any questions you may have about purchasing your first home.

Give your local Mortgage Choice expert a call to make an appointment today.

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Posted in: Home loans