Saving Tips For First Home Buyers
If you’re looking to make some big moves this year, and turn your home ownership dream into reality, you’re going to need a money in the bank! There are a couple of things you can do to speed up the process of saving for your first home, courtesy of our team.
Before the savings begin, you’ll need a goal to work backwards from. A widely recommended target is 20% of the total property cost, plus what you’ll need to cover stamp duty, legal fees and other costs. This is also the time to consider whether you qualify for the First Home Owner’s Grant (FHOG) or additional concessions, as these will affect the figure you’ll need in the bank. You can learn more about those here.
If you decide to build a home rather than buy an existing home, the structure for payments is slightly different. We encourage you to do some research into this, so that you receive the advice that best suits your needs.
Consider Existing Debt
Remember that any outstanding credit card payments, personal loans and HECS debts will also come into consideration when applying for a home loan. These will likely to impact your borrowing power. Perhaps one of your initial savings tasks will be to consolidate these debts. Get those paper trails in order today!
Another factor that the banks use to assess your loan application is how much credit you have access to. If you have a credit card that has a 10k limit on it, the bank will assess this is as a debt, even though you may not be using all or any of this. Reducing the credit limit to a smaller amount will benefit you when you apply for your mortgage.
From your previous administration work, you’ll have settled upon an end goal. Fantastic! Now it’s time to look to your income, your expenses and set a realistic savings plan that you’re able to stick to. In order to settle on an amount it may help to create a budget to give you an idea of how much you spend on essential items, to then work out what you can cut out to achieve your savings goal. A great way to do this is by tracking your spending over a few months, and then working backwards to figure out what can be avoided. Perhaps it’s time to commit to packing your lunches for the week, deciding to eat out only once per month or making your coffee at home?
A great way to focus on your savings plan is to open a new, high-interest savings account solely for your home deposit. Set up a direct debit to occur on payday and also consider adding to it as you cut out some of your unnecessary spending. Having your home deposit savings in one account will also help build your morale when you see the balance build from month to month.
There are also a great range of budgeting apps online that can help you keep on track!
The Aston Homes team would be happy to discuss the next step towards owning your first home. We also welcome you to visit our display homes and explore our communities as an option. Our doors are open from 11AM to 5PM daily at both of our locations. For more information, please contact our sales team.