Still living at home? It’s time to start climbing…
It’s a fact of life that adult “children” are living at their parental homes longer than they were 20 years ago … much longer.
It could be that life at home is just too easy and there is no incentive to move out.
Or is it because taking that first step on the bottom rung of the property ladder just seems insurmountable?
So just how do you get a toehold into the real estate market?
Firstly, putting your finances under a microscope and examining where you can make cuts and create savings is extremely important. Identifying overspending and under-saving is a great way to build a deposit for a house.
In fact, living at the family home while doing so will mean getting that deposit together will be a lot quicker than renting elsewhere and dealing with the realities of paying your own way.
The trick is to find a little extra money each month, instigate some clever budgeting and restrict debt to get ahead – all something a good financial planner can help with.
It may include refinancing existing loans and credit cards, and consolidating all debt into one easy-to-manage financial obligation.
Not only does it make it easier to keep track of your finances, with less bank fees will mean you will pay down your debt quicker.
While it’s super to have a hefty 20 per cent deposit ready (normally lenders require at least 10 per cent and like to see a history of saving before they allow borrowing), the government’s First Home Owner Grant (FHOG), which can assist you with up to $20,000, is a fantastic way to boost the coffers. While the grant is a national scheme, it is funded by the states and territories and administered under their own legislation, so it is essential to find out the legislation appropriate to you.
Once you have an idea of your deposit, it’s important to determine how much you can borrow. This will depend if you are buying as a sole proprietor or sharing the burden with a partner, loved one or even a friend.
A mortgage broker can look at what’s coming in and what’s going out and how much you can afford to borrow. This borrowing capacity analysis will allow you to determine where and what to buy. Be realistic – we’d all love to live in a five-bedroom mansion with a pool and stables but for the first-time buyer this is highly unlikely unless you win the lotto!
A mortgage broker can also help sift through the hundreds of home lending options and determine which is the best for you. They can meet with you in your home or wherever is convenient and discuss the options for you, ensuring buying your first home doesn’t have you sinking up to your neck in confusion and stress.
And they will also inform you as to the fees and insurances you will need to purchase your first property and what hidden extras you hadn’t considered when you first set out to buy it.
So, while it may seem daunting at first, buying your first property is actually quite easily managed provided you seek expert advice first and don’t try to go it alone.
It could mean the difference between stress or success!
If you would like to take the first step on to the property ladder, contact our home loans division today.
