With the rising prices in the real estate market, affording a house in Australia can be a major economic challenge for millennials. Anyone looking to buy a new home may have come across advice which didn’t guarantee them any sort of satisfaction let alone allow them to buy the home they have always dreamt about. Arranging savings is no easy task especially if you currently are living paycheck to paycheck. The key is to find a home which is within your budget and objectives. The following advice from real estate agents would be helpful and allow you to escape the “ rent trap “ .
Do not be too hard on yourself
It is important to keep an open mind when searching for homes. Accumulating a saving is not easy and if you are living on rent, that’s alright. Just because you are currently renting a home doesn’t mean that you are in a bad situation. There are many financially stable people who live in rented homes. It allows them the liberty to save money and makes sound investments including property.
Even if you feel like paying somebody else’s mortgage is not your cup of tea you may still have to consider everything else. All you need is a clear focus on your goals and you would soon be able to accumulate enough to buy your own property.
It may sound great that you could live the lifestyle you want and also save money but that is not the case. In order to save money and achieve your property goals you might need to give up on a few luxuries. You should aim towards savings a certain amount of cash on a monthly basis and putting it away. It is crucial that you have some understanding of your living expenditure. Having a clear idea regarding what is a necessity and what is non essential can allow you to spend wisely and improve your spending habits.
If it comes to dropping your fancy gym membership you might need to do so because it is all about priorities. Just because you are dropping the gym membership doesn’t mean that you need to stop exercising. It is best to look for alternative which can allow you to maintain your healthy lifestyle and also save on the much needed cash. Similarly if there are others things which can be foregone it would be in your best interest. With the rising property prices it is important that you try to save as much as possible in order to find your dream home.
It doesn’t mean that you would have to give up on all the pleasures of life it’s just that you should be making small compromises. There are certain things which you can still enjoy by cutting down the expenses.
Keep building your finances
Owning your own home has a number of emotional benefits. The sense of achievement and security is something which can allow you a great deal of peace of mind. With your own homeownership you would be able to feel a sense of security. Also people who own their homes have a whole lot of financial incentives. In the future if you do decide you sell your home you would get precedes which are tax free and allow you to have more money in your pocket when buying the next property. There are certain government schemes which allow first time home buyers to enter the property market. The first one being the First Home Superior Saving Scheme. Individuals have to make voluntary contributions into a super fund which is basically a saving account which they generally do not dip in to. Another option is the First Home Loan Deposit Scheme. The government guarantees that if your deposit is less than 20% of the property purchase price, it would save you from the lenders mortgage insurance.
Consider why you want to purchase a home
One of the most important aspects of a homeowners journey is to know their purpose. Get to know why you are buying home or why do you want to build your own home. Whether you are doing it for financial security or emotional security. Having a clear idea about the reason can help you stay motivated. The best thing about having a purpose allows you to build your first property regardless of the fact that it might not be the very best. Individuals who are able to purchase a property before they are 30 tend to be much financially stronger by the time they are 40. Also having some kind of financial discipline of saving and buying your first home would allow you to become a stronger and motivated individual.
Initial steps to purchasing your new home
- The first step is to open high interest savings account. However it is more than important that you should not be tempted to withdraw anything from it regardless of the fact how much you need to do so.
- If you are looking to build up the deposit quickly, you might need to look at assets which allow you capital growth as well as income. Make sure that you get advice from a reputable financial advisor who would allow you to understand your risk profile and make sound financial decisions.
- Work out the amount after that you would be able to save from your wages. It is best to put that amount straight into the savings account.
- Is there any other loans like a car or a personal loan? You may need to have a discussion with the mortgage advisor. Get to know if it is better to pay off your debts before entering into the property market.
- Make sure that you transfer existing credit card to another card on a balance transfer deal. Make plans to clear out the debt within the balance transfer period.
- If you are planning to build your own home you need to do the necessary research into different deposit schemes. However these require a limited level of saving thanks to the government provided support.
- Also look into the First Home Super Saving Scheme to assist you with building up on savings more effectively.
If you are thinking about building your own home make sure you talk to you an expert to help you with home design and land packages which are specially curated for first time home buyers.