Owning a home is a dream for most people, however these days it can seem out of reach. The truth is it can be achievable if you plan ahead. From saving for a deposit to navigating the complexities of mortgages and property ownership, there’s a lot to consider.
Let’s walk through some of the steps you’ll need to take.
Assess your current financial situation
Before looking for properties, take a thorough look at your financial situation. Calculate your current income, expenses, and savings capacity, that is how much you are able to realistically save each month to put towards your deposit. A budget or spending tracker will help you better understand your spending patterns. Your credit history matters so get an assessment of your credit score and debt levels. Knowing how you’ll be assessed by the bank is critical to understanding how much you can afford to borrow and comfortably repay over the life of the loan.
Set a savings target for your deposit
Most lenders require a deposit of at least 10% to 20% of the property’s purchase price. Start saving early and consider setting up a dedicated savings account for your home deposit. Look into government incentives such as the First Home Owner Grant or the First Home Loan Deposit Scheme, which can assist eligible buyers in securing their first home with a smaller deposit.
Having clarity on your deposit amount and timeframe will help you with the motivation and determination to create good savings habits.
Research the property market
Familiarise yourself with the property market in your desired locations. Research house prices, property types and whether you prefer to buy or build. If necessary, expand your search to suburbs further out to access cheaper housing or think about buying a smaller home with fewer features. Attend open inspections and auctions to get a feel for different properties and neighbourhoods.
Investigate your borrowing capacity and lending options
Use an online mortgage calculator to determine how much you can potentially borrow, the estimated repayment amounts as well as the associated costs such as stamp duty. Most banks have these available on their website. By understanding the total costs of purchasing and borrowing this will assist you in determining how much you can spend on your property purchase.
Staying the course
Saving for a house deposit requires discipline and dedication. It’s about focusing on the long term goal of property ownership. This requires making regular deposits into your savings account, even when temptations arise. By staying the course, you will cultivate valuable financial habits that will serve you well beyond buying your property.
Becoming home buyer ready requires planning, research, financial preparation and savings discipline. By following these steps and seeking guidance from professionals when needed, you’ll be well-equipped to navigate the home buying process with clarity and confidence.
This information is of a general nature only and does not take into consideration your objectives, financial situation or needs. Before acting on this information, you should review the Wealth Maximiser Financial Services Guide and Wealth Maximiser Terms & Conditions and consider this information having regard to your own objectives, financial situation and needs. Wealth Maximiser is operated by NobleOak Services Limited ACN 112 981 718 AFSL 286798.
