There’s lots of coverage about how hard it is to get into the property market these days. But there are steps you can take to guide yourself along the path to home ownership faster. Here are six top tips for getting into the property market.
1. Work out your budget (and we don’t mean how much you can afford to spend on a house)
The very first thing you should do is sit down and work out exactly what your household budget is. How much do you spend on groceries? Rent? Bills? Entertainment? The list goes on. Track your spending over a 3-6 month period to find out exactly how much your life costs you right now.
Then subtract your monthly spending from your monthly income to find out how much you’ve got left over to save. If it’s not much, or you’re not saving at all take a look at where you can cut back spending.
2. Set up a regular savings plan
We’re sure you’ve heard this one time and again… but have you done it? Setting up an automatic transfer into a high interest savings account means you don’t need to think about putting money away each month. Your savings will just grow before your eyes! And you’ll need them to move toward that magic number- the 20% deposit!
3. Save until you have a 20% deposit (at least)
Save, save and then save some more! You’ll want to have at least 20% of what you want to spend on a house squirreled away. That way, you won’t have to pay Lender’s Mortgage Insurance. And it wouldn’t hurt to have more saved so you can cover the upfront costs of stamp duty and legal fees easily.
4. Consider your home loan options
Ask yourself what do you want from your home loan? What key features or benefits are you looking for? Obviously the interest rate is going to be a deciding factor, as well as $0 fees, but what else do you need in a home loan?
Consider whether you want to hedge your bets and fix part of your loan, or you may simply want the freedom of the lowest rate. Free offset accounts, the ability to make early repayments at no cost and instant redraw are all additional benefits to keep in mind.
Once you’ve found the right fit for you, calculate your borrowing power and speak to a home loan specialist so you’ll know how much you can spend on a property and what your repayments may be.
5. Work out your budget (again!)
Now you’ve got your deposit, look at your household budget again and make sure you have room to accommodate your mortgage repayments.
6. Start shopping for a property
It’s said that the right time to buy a home is when you find one you love and can afford. To ensure you find something affordable, cast your net wide and shop for properties in areas you haven’t considered before, or focus on finding a property you can manage as an investment.
As you can see, with a bit of planning, perseverance and patience, getting into the property market is achievable. Stick to these tips and you’ll be on that ladder before you know it.
What can Qudos do for you?
.The information in this article is of a general nature and does not constitute as advice in relation to any investment or purchase. It has been produced without taking into consideration your personal financial circumstances, objectives or needs. Prior to making any decision you should conduct your own investigation and analysis of any benefits or costs associated with such. You should seek your own independent legal and financial advice. Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557, AFSL/Australian Credit Licence 238 305.
Published December 2016