Are you saving for your first home? Given the market at the moment it can feel like the goal posts are moving all the time when trying to save the deposit for your dream home. While there is no magic bullet when it comes to saving for a home, there are a few handy things to keep in mind when budgeting to help you into your home sooner.
Too often people spend first, and save second. Make it a priority to set up a separate account for your house deposit, and then set up a direct debit so that a regular amount is automatically debited from each pay into your savings account.
To take this a step further, research current interest rates available on savings accounts. Many high interest savings accounts are located on line only, and when opening an account you must nominate an account from which a minimum amount can be deducted and put into your on line savings account on a monthly basis. In this way you will qualify for the higher interest rate on your savings and lock away your savings account before you have the chance to spend it on the things you need, like beard oil and fixies.
Don’t Rely on the First Home Owners Grant
While the First Home Owners Grant has been a great way of helping people find their way into their first home, it is susceptible to change over time. This can be seen recently in WA where the grant for established houses was reduced to from $7,000 to $3,000 and the grant for building a new home was increased to $10,000.
When saving for your deposit, determine what amount you need as a deposit and keep this as your goal without factoring in the grant. If the grants are still the same when you reach your goal then it’s a great bonus that will allow you to reduce the size of your loan.
Credit cards are the kryptonite for many first home buyers. Did you know that when the bank looks at your lending capacity they assess your credit card on what the limit of the card is, and not on what you owe?
This has been a roadblock for many first time buyers before, even if they owe nothing on the card. So if you don’t use your cards (even if you do) reduce the limits, or if you can, get rid of them altogether.
In addition to helping you when it comes time for your loan application it also takes away the temptation to spend up big on that flat screen tv to congratulate yourself once you have bought your new home.
While saving for your house deposit is not easy, it doesn’t mean you have to put your entire life on hold. Following a few simple steps to take the temptation to spend from out in front of you can go a long way to getting that deposit sooner.
For more information, or to help with a savings plan for your first property Contact us today to arrange an appointment and let us work with you to help you reach your financial goals.