It you’re planning to buy a home, the golden rule is to save as much as possible to make a deposit. Nowadays, it’s more challenging than ever to do so.
In Australia in recent years, we’ve witnessed a troubling pair of economic trends – the price of a house in many major metropolitan areas is rising quickly, yet wages remain relatively stagnant. This means it’s going to take longer than ever before for ordinary working families to buy homes.
It’s important to save as much as you can if you want to buy real estate, and that’s especially the case today. If you’ve got your sights set on owning a house soon, it’s crucial to stash away as much as possible from each pay check.
Developing consistent saving habits
The best solution is to save aggressively. The more you can stash away from each pay check now, the fewer headaches you’ll have later. A heftier deposit means fewer repayments you’ll have to make with interest down the road.
A good rule of thumb is that 10 per cent of each pay check should go toward your deposit – ideally, in a separate bank account so you won’t be tempted to spend that money. Upping that percentage will help you afford a home sooner – and so will working with a broker who can track down affordable low-interest loans.
There are other options to get into the housing market
In markets where affordability is an issue then we are seeing borrowers look at other alternatives. This can include co-ownership with friends or family if you cannot afford to enter your preferred market on your own. It can also include entering a different market (sometimes interstate) as an investor. You can choose to buy more affordable property such as an apartment rather than a house. This atleast gets you into the market.
Over time you can build your equity and this can open up other possibilities to get your dream house later. It may not be possible to get what you want straight away, especially in markets like Sydney where most suburbs have a median price of $1,000,000 and many now have a median price of $2,000,000.
There are also loan option such as low deposit loans or Family Pledge Guarantee loans where support of your family can allow you to buy without any deposit.
Get budgeting help from the professionals
Saving for a home is one of the biggest challenges you’ll ever have to tackle. To get a leg up on things, contact us today. We can help you with strategies to get you into a home sooner and importantly can help you know what you need to aim at. We have connections with a wide-ranging network of Australian mortgage lenders, and we can find one who knows your target market and can help you plan your big purchase.