The saying goes: ‘Good things come to those who wait’, so by taking a planned approach to your first home purchase means you’ll be in a financially better-place 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
Choosing your suburb is an important part of your plan, and will make a huge 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, set a savings plan and stick to it! By setting this goal, you will know exactly how long (roughly) it will take to save the deposit, and by watching your money grow it will further motivate you to keep on going! 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.
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, Contact either Owun, Suzanne or Costa on 02 9517 1818 or firstname.lastname@example.org. Or, if you feel like dropping in at our office, we are located at Suite 106, Flourmill Studios, 3 Gladstone Street, Newtown 2042. Be sure to share our blog on Facebook and Twitter and let others join the conversation!