Getting ready to buy a home starts with saving for the deposit. It might seem challenging, but with a solid strategy, you can make it happen. Here are several things to consider that may help get you started and on track for home ownership sooner than you think.
Check your current financial situation
Ok, this one seems a little obvious, but let’s start simple. Understanding your financial situation will get you in a good place to start setting your budget. Make sure to take a look at:
- What you earn: Your paychecks or other income.
- What you spend: Bills, groceries, fun stuff—where does your money go each month?
- Your debts: Loans or credit cards you’re paying off.
- What you own: Savings or things you could sell if needed.
Understanding these parts of your money helps you see how much you can save for your new house every month.
How much can you borrow?
Having an idea of the amount you can borrow – which is determined by your current financial situation – can help you figure out how much you’ll need to save. But remember, there are other costs involved in buying a house, like stamp duty and conveyancing fees.
To figure out the deposit you need to save, consider:
- The price of the house you want,
- Plus any extra fees and charges,
- Minus the amount you can borrow.
If you’re unsure about these numbers, I’m here to help. As your mortgage broker, I can work with you to understand your financial circumstances and how much you can afford to borrow.
Set your savings target
Here’s what you’re aiming for:
- 20% of the home’s price
- Extra money for other house-buying costs like lawyer fees, checks on the house, taxes, moving, and insurance.
Even though some places might let you buy with just a 5% deposit, saving more is better. It means borrowing less and showing banks you’re great with money, which might help you get your loan approved.
Government help? Yes, please!
If you’re buying your first home, you may qualify for the following:
These benefits can really help boost your savings by providing financial assistance and reducing costs when you’re buying your first home.
Government programs may offer grants, discounts, and tax breaks, which means you have more cash upfront and pay less over time.
How long will you be saving for?
If you know how much you can save each month and how much you’re able to borrow, you can start to estimate how long it’ll take to save for your deposit.
Check out this handy savings goal calculator to find out:
- How long it will take to reach your savings goals
- What steps you need to take to put your plan into action
When you’re getting close to your goals, it’s a good time to seek pre-approval. This means a lender has preliminarily agreed to give you finance for buying a home, giving you a clear idea of what you can afford before you make the final decision.
Start saving!
With your plan ready, it’s time to get saving. Making a budget helps you find extra savings spots. Automatic transfers to your savings make sure you keep saving regularly. If buying a house isn’t happening right away, think about investing to grow your savings.
Saving for a deposit is a big goal, but you can definitely do it with a bit of planning and help. As your mortgage broker, let me guide you on this exciting journey to owning your home. Get in touch today.
Source: Finance Focus
