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How To Buy Your Own Home Sooner

How To Buy Your Own Home Sooner

Buying your own home can seem like a far off reality at times, but there are things you can do to get into your own home sooner. Following are some tips to help you get there.

Maximise your savings for a deposit

Saving a deposit is usually the thing that stands between most people and getting into their own home. Typically, a 20% deposit is ideal but the more you save, the less you’ll have to borrow.

To maximise your savings, it can pay to work out a budget and come up with a savings plan. When you’re looking at your expenses while doing up a budget, you might be surprised by the non-essential things you spend money on which you can cut back on. Even small changes to your spending habits soon add up.

Some people also look at moving back home while saving a deposit for their first home to save on rent. While it may not be ideal, the amount you can save on rent could get you to your savings goal a lot quicker.

To make the most of the money you are saving, shop around for a high interest savings account. Aside from the interest you will earn on your savings, these accounts are also great because they’re generally not easily accessible like your everyday transaction account and that means less chance of dipping into the savings when you don’t need to.

Another option for locking your savings away is a term deposit. You put your money into a term deposit for a set period of between one month to five years and over that time it earns a fixed rate of interest.

More help with a First home saver account

Another way to boost your savings is with the Government First home saver account. These accounts are specifically designed for saving for your first home and there are some good benefits with them.

For the first $6,000 you put in each year, the Government will contribute 17% which is an extra $1020 into your savings. Another good feature is the interest you earn in the account is only taxed a

There are some other conditions that come with the account though. You need to save a minimum of $1,000 a year over 4 financial years before you are able to access the money. If you do buy a house before the 4 years is up, you still need to wait until the end of the 4 year period to access the savings at which time you can put the money towards your mortgage.t (mortgage’s?) 15%.

For more information including the other conditions, see moneysmart.gov.au.

You can still buy with a smaller deposit

If saving a 20% deposit isn’t realistic for you, it is possible to get a home loan with a smaller deposit, generally around 5-10%.

When you are borrowing more than 80% of the property value, you will typically have to pay Lender’s Mortgage Insurance (LMI) which can be several thousand dollars. LMI is essentially to cover your lender if you default on your mortgage payments.

Depending on the market, it can be beneficial to buy a home sooner with a lower deposit rather than waiting longer to save.

Consider guarantor home loans (help from your parents)

Another possible option to get into your own home sooner if you have an insufficient deposit is a guarantor home loan. Essentially, this involves using the equity in your parent’s home as security against

your home loan. This security may be used to avoid Lender’s Mortgage Insurance, to make up a shortfall in your deposit or to maximise your borrowing power.

Talk to your broker about how this option might work for you.

Buy what you can afford

Obviously, the more expensive the house you want to buy, the more deposit you will need to save and higher mortgage payments you will need to cover once you get into the house.

Considering a house that is in a different area, is on a smaller block or isn’t as new as what you would have first liked can open up your options for lower priced houses that you will be in a position to buy sooner. Your first house won’t necessarily be your dream home, but it doesn’t have to be the one you live in forever. If your first home is a good investment, you could use the equity you build in your first home to upgrade in the future.

Lend Me – Home Loan Brokers – Perth, Western Australia

How we've helped our clients...

"Starting up a new business isn’t easy, with so many things to think about it can be quite a stressful process. With the services of Lend Me Asset Finance and Locate Me, they have really helped to take this stress away in the way of meeting me on my job sites to sign documents and dealing directly with the Car Dealers, Bobcat Dealers and even my accountant.

The guys at Lend Me really do take the time to listen to what you are after and work in to suit you and make the transaction so simple and convenient, I can’t thank them enough! I’ve also recommended their services to 3 friends already and have only had good feedback. Lend Me have certainly gained a client for life! Reece"

"Hi there, Saturday just gone, I picked up my dream car, a 2013 black lancer LX.

I'd like to take this chance to say Lend Me Car Loan customer service was by the far the best I have ever received. What I thought was going to be tough work turned out to be the opposite. The process easy, simple and quick for me, she did the hard yards... I will be recommending friends and family... Thanks again! Regards, Stephanie"

I just wanted to say thank you... This has been the smoothest process. You and the other girls I dealt with at Lend Me Home Loans were so friendly and so efficient with everything, I felt like I was the only customer you were dealing with.

I will definitely be raving on to loads of people about Lend Me and the great service you provide.

I am stoked, this will take so much pressure off and will seriously change our lives... we can actually get ahead on payments and start saving some more money.

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"Emily & I just want to take this opportunity to say a very big thank you for seeing us through our first home purchase and home loan, you have been a massive help not to mention getting us out of a sticky situation. We will definitely be in touch in the near future and will refer/recommend you to our family & friends if looking out for a friendly, helpful and reliable mortgage broker.

Take care and speak soon. Matt & Emily" 

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