Your first home! It’s an exciting prospect, and one we all hope to achieve. The sooner you can get on the property ladder, the easier it is to climb up it and attain a level of financial stability. But taking that first step is challenging. After all, no bank will accept a mortgage request without a deposit, and saving for this deposit is tricky. But yes, that first home dream is achievable. What it does take is perseverance, determination, and a few smart decisions.
1) Small savings add up.
At the top of any plan must come saving for the deposit. This involves being sensible with your spending. One tip you should look at is eliminating “dead” money from your budget. If your utility company offers a prompt payment discount, make sure you take advantage of this. This also goes for any bills which incur a late payment fee. If you use a credit card, pay this off in full every month. Late payment fees and interest are a waste of money.
2) Take advantage of superannuation savings schemes.
From 1 July 2018, you can use some of your superannuation savings towards a first home deposit. Voluntary contributions of up to $15,000 per year ($30,000 in total) can be withdrawn. You’re already in the savings habit with your super scheme, so why not increase your contributions a little? If you’re worried that this will damage your plans for a comfortable retirement, just remind yourself that still renting, or paying off a mortgage when you’re 70, is even more damaging.
3) Be realistic.
Your first home is almost certainly not going to be your last home. Once you’ve got your foot in the door of property ownership, you can always improve. Buy in less popular suburbs, or consider the options of moving to a cheaper city. And do you need that extra bedroom?
4) Keep saving past your target.
You probably have a figure in mind as to how much you need to save. This is usually a percentage (say 20%) of the expected price of your home. However, there are always extra expenses involved, so you shouldn’t stop once you’ve hit that target. This will help you when it comes to fees or charges you may not have thought about, like higher-than-anticipated legal fees, or moving costs.
5) Get pre-approval.
Speak to your bank or your lending institution before you start looking seriously. They will let you know if they are prepared to finance you based on your current circumstances. Without the assurance of knowing that you’ve got the finance lined up, you run the risk of finding your dream home, only to be disappointed.
6) Take your time.
From your second home onwards, you will be caught between needing to sell your existing home while simultaneously buying your new one, and this can be a real juggling act. With your first home, you’re free of that worry. Look around, check prices of houses which have sold in the vicinity for a comparison, and don’t feel as though you have to buy if the place doesn’t feel right. The vendor is the one who is under pressure, not you – they’re the ones who need to sell. You will only have this luxury once, so make the most of it.
7) Keep your eyes on the prize.
When you’re saving towards a target, you will get there a lot sooner if you don’t get side-tracked. Impulse purchases, or the “nice to have” items, are all fun to have, but are they necessary? The faster you save, the sooner you can stop paying someone else’s mortgage and start paying your own.
Your first home purchase is the most significant financial decision you will make in your life. But like all tough decisions, there is help available. Check out our other financial tips and feel free to call us for some independent advice.

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