Learn my Secrets of Buying my First Home
Originally seen on: http://www.keystonefinancial.com.au/whats-the-secret-to-buying-my-first-home/
Saving for a Home Loan or Mortgage isn’t very exciting but it has to be done if you want to eventually own your own home. Here are simple some savings tips for First Home Buyers to help you take that first step into the property market.
How much should I be saving?
One of the first rules of saving is to set a goal. But what should that goal be? Different people have different needs, but a great starting place is to save a minimum of 10% of your pre-tax income. Not currently saving that much? Read on.
What are you spending?
To help with saving, you need to know where you’re currently spending your money. And not just on the big items such as rent, utilities and groceries. Grab yourself a notebook and every time you spend money, write it down. Everything! For at least a month but preferably longer. You’ll be surprised where your money goes.
What do you really need to spend?
If you’re a typical First Home Buyer, you probably haven’t been exercising a lot of financial restraint to this point. Invited out to dinner? You go. See shoes you like? You buy. Take lunch to work? Are you kidding? There’s nothing wrong with that, but if you really want a home, you’re probably going to have to start making some sacrifices. Look through your spending record and decide what you’re willing to give up. You might decide, for example, that life would still go on if you didn’t spend $1500 a year on coffee.
Get rid of credit card debt.
You probably used to pay your credit card off every month. But then one month you couldn’t quite manage it and things snowballed from there. That credit card debt is killing you. It is expensive money and you need to eliminate it. Consider transferring the debt to a new card that gives you an interest-free period, and save like mad to get your balance down to zero as soon as possible. Then consider reducing the limit of your credit card and ensure that you only use credit when you know you will be able to pay the card off at the end of the month.
A savings history
If you’ve spent everything you’ve earned — and then some — don’t be surprised if the mortgage market doesn’t put out the welcome mat. Lenders like to see proof that you can save. So start putting something aside every month and you’ll be surprised how quickly it adds up — and how much more popular you’ll be among the lenders. Remember, the more you are able to save now, the less you will need to borrow which may drastically reduce your repayments once you do take out a mortgage. Want more savings tips and help with together a personalised savings plan? Contact a Keystone Financial consultant, we would love to help you realise your dream of home ownership.