Are you looking to enter the property market and struggling to build a deposit to purchase your first home?
Here are a few handy tips to help you reach your savings goal:
- Write a budget and stick to it – Determine what your monthly income and expenses are and write it all down – you’ll be surprised how much you may be overspending on some unnecessary items. These savings can go towards your deposit
- Get rid of your credit card debt – Make sure you are paying off your credit card each month to ensure you are not paying any interest. If you cannot pay off your credit card each month you are living beyond your means! Paying interest means less money to put towards savings. Keep the credit card limit low so that it is manageable.
- Establish an online savings account – Determine an amount you can afford to deposit into an online savings account each week. These usually offer better interest rates compared to standard savings accounts. Many pay bonus interest for not making any withdrawals during the month.
- Plan, Plan, Plan – Use a savings calculator to determine how much you need to save each week to reach your target within your desired timeframe. There are many useful calculators available on the web. This is one you may find useful: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/savings-goals-calculator
- Limit your spending on take away food and drinks – Rather than buying your lunch and dinner every day, prepare your lunch at home and enjoy a home cooked meal for dinner. While your waistline will improve because it is probably a healthier option, your wallet will become fatter with the money you will save! Also, if you buy yourself a $200 coffee machine rather than purchasing a $3.50 coffee every day, you will have paid it off in 2 months with the money you save
- Don’t need it. Sell it! – Do you have any unwanted or useless collecting dust in your home? Put them on eBay or find some other way to sell them. It adds to your savings and means less “stuff” to move when you do find your first home.
- Be tough on yourself. Go without! – Ladies, do you really need those new shoes and designer handbag? Gents, do you really need to go to the footy each week when you can watch it in the comfort of your own home for free?
- Be realistic about what you can save and how quickly – If you have a 20% deposit you will avoid Lender’s Mortgage Insurance (LMI). But, that may take quite a while to save. So if you buy sooner with a lesser deposit, pay LMI (it can mostly be capitalised on top of your loan – on which you will pay interest) and your property appreciates in value then you might be in front. We can help you decide if this situation is right for you.
- Keep your savings account statements – you will require these when it comes time to apply for your home loan. Lenders like to see a regular savings pattern as it gives them comfort that you have the discipline to be able to meet your loan repayments.
- Keep in touch with your Laurentide Mortgage Broker – while you are busy saving, lenders are forever changing their lending policies and interest rates are changing. By keeping in touch with us we can keep you abreast of these changes which may help you purchase your first home sooner.
Don’t put your plans on hold any longer. Start saving today!
Give Laurentide a call today on (02) 9954 5944 and speak to our mortgage broker, Anthony Martin, to discuss how much you will need to save for your first home purchase.