First Home Buyer TipsBy Dave Fleming : 19 September, 2020
So, are you looking to buy your first home?
This can be a major step for anybody, and you will find quite a few things to consider, not the very least of these is the way to get the funds for a house. Sure, there are lending options readily available for property purchases; however you will need to have some money on hand to pay for a deposit, also there are other costs, which include fees and settlement costs that you may not be able to get included in a borrowing arrangement.
How Much Money do You Have to Start?
If you’re like a lot of first home buyers who are looking to purchase using a low deposit home loan you will still need to do your sums to calculate how much cash you will need. Most lenders who provide low deposit home loans want to see that you have at least 5% in genuine savings. What does this mean? It means you will be able to demonstrate that you have saved 5% of the purchase price over a 3 month period. Or, you have had that amount of funds in a savings account in your name for at least 3 months.
Basically they want to know if you have fiscal discipline and a sense of responsibility. In addition, if you’re buying an established property you will also have to prove to them that you have enough additional funds to complete the purchase transaction. This means you will need enough extra cash to pay for purchase stamp duty and legal costs.
Are You Eligible for Government Concessions?
If you’re purchasing a new home that nobody’s ever lived in before you might be eligible for first home buyer concessions. If you fit into that category you should check with your local states Office of State Revenue for any programs they may have.
So, what are some methods the everyday Australian can use to get hold of some funds to cover the dollar amounts required to purchase a home?
Cash Generating Tips
If you are planning to get a property inside of 12 months you will want a savings strategy that’s going to yield immediate results. Saving cash is usually a complicated challenge if you only have a preset amount of disposable income on a month to month basis. A Second employment opportunity could be a possible option for generating fast savings.
Investigating other cash flow scenarios including a cash value insurance policy might help put some cash together. However, be mindful that withdrawal penalties could be applied, nonetheless it may be well worth the expense to get your first home.
Additional ways to pull together cash include things like selling off valuable items on the net or with a garage sale. Spare cars, stocks and shares, collectables, along with other things that have got a good value can easily generate big returns.
Some lenders will allow a gift from the borrowers parents as long as the parents are prepared to put in writing that the money is a gift and non-refundable.
Longer Range Planning Strategies
Should you be concentrating on a long range strategy you naturally will have much more time to accumulate the required funds. Investing more money into a term deposit or perhaps a cash value insurance plan may help keep hold of the funds for your new home.
Starting a savings bank account can certainly help ensure that the financial resources are readily available and generating interest along the way.
An additional second job would still be another possibility, but if you have the luxury of much more time to save you would then have the luxury of having to work a lesser number of hours.
Starting a home based business would provide a flexible alternative for generating extra cash flow. Nevertheless, choose wisely in finding a business enterprise that is both rewarding and legit.
Tithing is an Oldie but a Goodie
It takes a smart person to make money, however it takes an even smarter person to hang onto it. In today’s society most people are so busy paying everyone else, there is never any money left over to pay themselves. To reverse this habit a person needs to sit down and map out a budget of their expenses. Once that has been done, whittle those expenses down until there is a cash surplus left over each month.
A worthy goal is to aim at saving a minimum of 10% of your net income each month. In other words, before you pay anyone else you pay yourself 10% right off the top. Then, you figure out how to manage your lifestyle so you can live on the 90% that is left over.
The purchase of a home is a sizable, but very worthwhile step, create a workable plan for getting the money together that you need and then stick to the plan through thick and thin.
About About Dave Fleming
Dave is enthusiastic and fascinated by the digital and social media worlds. He is passionate and enjoys entrepreneurial pursuits, wealth creation financial strategies, health, fitness as well as cooking. Dave is the webmaster at www.mastermortgagebrokersydney.com.au, which is an information website pertaining to loans. He has a deep commitment towards writing about and helping people understand the basics of how the financial world works.
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