Despite the fact that interest rates are at record low levels many people find just the concept of borrowing money to be particularly stressful, to say nothing of owing money once you have actually borrowed it.
This may seem strange to the seasoned investor, but the casual or inexperienced borrower the numbers are generally large and add up to amount that nobody is ever going to save so the brain just can’t get the mind around it.
However, owning your own home is one of the major life goals for most people, so saving for a deposit can seem daunting at first, but it doesn’t have to be.
Here are a number of things to consider to get you started and on track for home ownership sooner than you think.
Take stock of your financial position
This is called the 5th point of the compass – Where do I stand right now?
Knowing where you’re starting from will help you set up for success. Understanding your financial situation will get you in a good place to start setting your budget, and should include things like current assets, income, any debts and living expenses. Now you’re able to see how much you’re able to save each month to put away for a deposit.
Know how much you can borrow
Having an idea of the amount you can borrow – can help you figure out how much you’ll need to save. Use the tools that are readily available online and then factor in what is left after you meet your other living expenses and commitments.
It’s always best to speak to your broker to get a more detailed assessment. With a loan pre-approval, you’ll know exactly how much you can afford to pay for a property. It gives you a solid understanding of your finances and a clear spending limit. Getting pre-approved through a reliable broker can also help identify possible issues that you may not be aware of, as well as spot something that may have been overlooked.
How long will you be saving for?
So, if you know how much you can save per month and how much you can borrow, you can now figure out roughly how long it’s going to take to save that deposit!
Check out this handy savings goal calculator to work out:
- How long it will take to reach your savings goals
- Steps to take to put your plan into action.
When you’re close to your goals, seek pre-approval, which means lender has agreed in principle, to provide finance towards the purchase of a home without committing to final approval.
Consider if you’re eligible for any government grants
If you’re a first home buyer, you may qualify for the following:
- First homeowner grant
- First home super saver scheme
- First home loan deposit scheme
- Homebuilder grant
One of the easiest ways to get the ball rolling with your home loan deposit is to reach out to your mortgage broker or Financial planner. We’re here to help you with anything you need, and with years of experience, we will be able to get you on the road to home ownership in no time. When your done with look through our little booklet on how to de-stress your mortgage because now the fun really starts !”
De-stress a mortgage ebook.pdf
Article Supplied by Scott Heathwood of https://www.wealthyandwise.com.au
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