Saving smart for that first home
Strong growth in South Australia’s property sector is great news for those already on the property ladder, but for first home buyers facing a new all-time high $470,000 median house price it can be daunting.
The good news is there are a number of ways to get a foot in the door of that affordable first home, and Credit Union SA CEO, Grant Strawbridge, shares his top tips:
It is a no-brainer that as a first home buyer, you need to save up the largest deposit you can because it strengthens your buying power and means a smaller mortgage. Take some time to decide on a savings account for your deposit on your first home, as there are many different options available. You will want to pick one that suits your needs but be sure to pick one that has no fees.
It’s no good having the perfect savings account but no money to put in it, so try and make every dollar count and try to reduce unnecessary spending on extras where you can. You will be surprised how much you can save by taking lunch to work, reducing the number of takeaway coffees, and eating out less for a period of time.
Explore ways to bolster your savings. For example, the State Government's First Home Owner Grant.
A Family Guarantee solution lets parents leverage the equity in their own home or a term deposit to guarantee a portion of a home loan for you. Not only does this avoid the expense of Lenders’ Mortgage Insurance, it means that you can potentially buy a home sooner.
Pick and choose
There are a lot of home loan options available, so professional advice about whether a variable option is better than a fixed rate, or if a split rate is more suited to your circumstances is a must. With Standard Home Loans, Discounted Home Loans and Home Loan Packages to choose from it is smart to take the time to compare different loan types. Be sure to ask your lender for information on each home loan option so you can easily compare and pick the right loan type for your needs. Once you have settled on your loan type, you will know exactly what the repayments will be and how much you can afford to spend on a property.
INFORMATION YOU SHOULD KNOW
This article is intended as general information only and has been prepared without taking into account the personal financial situation, objectives or needs of the reader. Before acting on this information, you should consider its appropriateness, having regard to your objectives, financial situation and needs. You should always seek professional advice or assistance before making any financial decisions.