Dreaming of owning your own home? With house prices as they are, saving for your first home deposit can feel daunting. But the good news is, it’s possible.
Here are some practical tips for breaking into the property market, and making your dream a reality.
1. Define your goal
While you can dream big, and bayside, it’s fairly pointless planning to buy a property way outside your budget. Start reviewing the real estate landscape with realistic goggles, and work out where you can afford to buy.
Think about practicalities, like distance to work, transport and local amenities.
You might need to start small. Consider purchasing a unit, instead of a larger house, if you need to stay in the city. You could also consider buying regionally.
With your approximate budget in mind, work out how much deposit you will need, and calculate other costs like stamp duty, conveyancing costs and building inspections. Remember that you might be eligible for a first home buyers grant, and stamp duty concessions.
2. Make a savings plan
Once you have a clear financial goal in mind, it’s time to start squirrelling away. The deposit and fees may seem a lot, but putting aside money every week adds up over time.
Do a budget and work out how much you make every week, how much you need to spend, and how much you can afford to put away. Start a high-interest savings or term deposit account, which will earn you interest, and keep other costs down. Consider setting up an automatic transfer, so part of your income directs straight to your savings, before you have the chance to touch it.
3. Clear your debts
Pay off your credit cards, shop cards, and any other loans hanging over you. Over time, this will save you money on interest. It will also improve your credit score. Lenders want to know how reliable you are as a borrower. The less debts you have, the better your credit score.
You can check your credit score once every 12 months with credit reporting companies, such as Equifax, Dun and Bradstreet and Experian. Once you know your score, you can chat to your Smartline Adviser and brainstorm ways to improve this score.
4. Review all your options
Gone are the days we can pick up a beautiful property for $40,000. Now, that barely makes up the deposit. Even with interest rates at record lows, many of us need to think creatively about ways to break into the property market.
Chat to your Smartline Adviser about first home buyer incentives. Other options include buying with trusted friends or family, buying small and regional and renting where you want to live, or getting a guarantor to help secure your deposit.
5. Get advice
Buying your first home is a big step, so the more help you can get, the better. Chat to your Smartline Adviser about your personal situation and get advice about how to make your first home dream a reality.