Saving a deposit for your first home

September 24, 2014 by with no comment

homeloan

 

Buying your first home is often daunting. The idea of saving your deposit and making such an important investment can be scary…and hard!  Here are some simple tips to help save.

1.  Firstly you need to work out how much you need to save and how much you can actually afford.  Visit auctions and real estate agents in the area you are interested in buying in, to get a feel for how much homes are selling for.  Next, use the many  online mortgage calculators available or visit your bank or mortgage broker to discover how much you can realistically afford to borrow.  Remember to include hidden costs such as stamp duty, inspection costs etc.

2.  Develop a savings plan.  Write down your goals along with how much you need to save.  Devise a plan of steps you will take to reach your savings goal and tick them off as you achieve them.  Being able to actually see a record of your progress will encourage you to continue on to reach your goal and buy your first home.

3.  Cut back on the extras.  Keep a record of outgoing costs.  Be sure to include everything from trips to the movies to grocery bills. Have a close look at where you can cut back and reduce your outgoing costs.  It may mean that for a period of time you eat out less and catch the bus to work rather than fill the tank with petrol, but every cent will make a huge difference to your end total saved and will bring you one step closer to owning your own home.

4.  Move home!  This isn’t an option for everyone but if you have the ability to move home and save, then make the most of it.  If you can live with your parents and avoid paint high rent then this will assist you in being able to save more over a shorter period of time.

5.  Make your savings work for you.  There is no use having money saved, sitting in an everyday account.  Talk to your bank and find an account that will earn you interest while you save.  There is also the option to have the account set up so it isn’t easy to access, making it more unlikely you will spend your savings on everyday items.

By following these simple steps, thinking before you spend and saving smart, you will be well on your way to owning your first home.