The struggle to save is real with the time now being more than 5 years to save for the average deposit amount.
With so many struggling to save a property deposit to buy a home, we spoke to several experienced Mortgage Brokers for some tips for prospective first home owners.
- Reduce your existing debt…….quickly
Pay off your personal loan, credit card debt, car loan as quickly as you can. Ensure repayments are done on time as any delay in payment may affect your credit rating and future ability to borrow. Review your credit card limit and if you aren’t using it or if it is more than you monthly expenses, reduce it. And always make sure you pay it off on time to avoid interest charges which are usually more than 15%.
- Set a budget & save as much as you can
When budgeting, people often work out what they need to spend first, then save whatever, if anything, is left. If you are saving for a deposit, start by working out the deposit you will need over what time and then break that down to a weekly amount. Then commit to saving the required weekly amount FIRST and work out what you can spend the balance on. This will ensure you limit unnecessary spending.
- Do your research
It’s prudent to do your research into areas you would like to live in and be realistic about what you can afford. Ultimately, it all boils down to your needs vs wants and what you can afford within your price range. A mortgage broker can help to set a realistic borrowing limit for you and from there you can work out your deposit requirements.
- Move in with family
As scary as this might sound, imagine how quickly you could save if you were able to save whatever you are currently paying in rent! Family members are often happy to help – even for a year or two, this can take a big chunk out of your deposit needs.
Yes, it is not a nice word but saving for greater goals often involves some sacrifices along the way e.g. forgo that extended yearly overseas holiday for a period of time until you reach your savings goal. You can replace it instead with a more affordable local holiday e.g. a weekend budget trip instead, so you can still have a much-needed holiday but at a more affordable cost.
Thanks to our Mortgage Broker clients for these great tips.
With property prices doubling every 10years (as historical records have shown), you might like to consider adopting a few of these suggestions towards achieving your dream of owning your own home.