The first step in buying your first home is saving for your deposit. Saving for the deposit of your first home is probably one of the most rewarding, fulfilling, and uplifting financial goals that you’ll ever work on. With the cost of property these days, most people take a long time to save that initial deposit. It also requires a lot of motivation and a lot of focus to actually get there. Hopefully you have the motivation, focus, and determination that will help you get you where you want to be as quickly as possible.
Step 1: Speak with a mortgage broker.
Make an appointment to see a local mortgage broker and have a chat about what your financial goals are. The mortgage broker will ask you get to know you so they understand where you stand financially. Then, they can work out how much you can afford to borrow and what you can afford to buy. This is really important because it will give you some really defined goals to work towards and will help you refine your property searching.
Typically speaking, the bank will give you the maximum amount you can afford to borrow but it isn’t always advisable to borrow up to the full amount because it’s based on a thirty-year term which means it’s going to take you thirty years to pay off. You definitely don’t want to spend thirty years paying off your home loan. If possible, try not to borrow the full amount because you want to pay down your home loan as fast as possible.
Step 2: Open a separate savings account.
This is where all of your deposit money is going. It’s a dedicated savings account. If possible, it’s actually recommended nicknaming this amount on your online banking as “My Deposit Savings”. This is going to help you feel like you’re turning your goals into a reality, which is really important because it’s going to help build momentum and help keep you focused.
Step 3: Do a budget.
Doing your budget is really important. You need to know where you hard-earned cash goes. You can also work out how much you can afford to save by doing a budget. Potentially, doing that will also help you determine how much you can increase your savings. You can work out how much you can afford to save per month. Set up an automatic transfer into your savings so that the money automatically goes into your deposit savings account each month. Make sure this is set up on the day you get paid so that the transfer happens before you even get to see the money. Do it this way and watch your deposit growing bigger and bigger overtime.
Step 4: Start saving.
This is the most exciting part of all. You can actually see your goals starting to happen. You’ll also see if you’re taking the right and responsible actions to make your goals become a reality and actually go buy your first home. You may also want to know more how you can save for the deposit of your first home with these five savings tips.
Final Step: Find, create, and build extra savings.
Start manifesting and creating savings beyond your monthly savings. This is where you need to start being creative and actually put in so much hard work and that means earning and saving money from elsewhere. Some of the things you can do are selling things online, getting a weekend job, do some casual work, or have a garage sale. There are so many things you can do outside the realms of your normal earning capacity. Every time you make some money, be it be $10 or $10,000, put them in your deposit savings account so get closer and closer to buying your first home.
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