While the “Great Australian Dream” is alive and well, it’s certainly changed shape over the years. A big house in the suburbs is still a priority for some, while for others, it’s an apartment closer to the city. Whatever sort of home you’re hoping to get into, there are plenty of costs that will need to be covered.
Help is at hand
We realise that saving for your first home can seem like an enormous task, and sometimes unattainable. But don’t lose hope. There are a number of services, tools and government grants designed to make it easier to enter the property market.
And of course, we’re here to help too. Getting the money together for those initial costs all comes down to making sure your finances are in order and you’ve got a savings plan. Try putting these tips in place to get into your first home faster.
- Prepare a budget and stick to it. Avoid spending on non-essential items and impulse purchases, as this can delay your dream of owning your own home.
- Put money towards your home deposit first. Open a separate bank account, ideally a high-earning savings account, then set up an automatic transfer for every payday. Also, make top-ups whenever possible.
- Pay off your credit card and any personal loan debts. This will increase your borrowing power.
- Record and analyse your spending over a month. This will reveal opportunities for savings. Write down everything, including miscellaneous items, such as coffees, taxis, presents and meals out. These everyday extras can really add up over time. For instance, two takeaway coffees a day can cost up to $200 a month; money that could instead be put towards your first home deposit.
- Look around for deals. From switching supermarkets to bundling all your insurance with just one insurer, there are lots of ways to get better deals on various products and services – you just have to do a little digging.
About the deposit
To obtain a home loan through a bank, generally a minimum 5% deposit is required; this would then attract Mortgage Insurance, stamp duty and additional costs. To avoid having to pay for Mortgage Insurance, a 20% deposit is required plus stamp duty and additional costs.
Looking beyond your deposit
As well as the deposit on the cost of the home itself, there are a number of extras that also need to be covered. These include stamp duty, building inspection fees, pest inspection fees, solicitor/conveyancer fees, loan establishment and property valuation fees.
Then on top of these, there are things like moving costs (furniture removal, cleaning), insurances for building and contents, electricity, telephone and internet.
While it will take time, patience and a lot of discipline, if you’re determined enough to get your savings together, you will be able to make it happen. By starting with the tips above and putting a plan in place, you’re already one step closer to owning your own home.