Getting your first property is an important milestone for many Australians, but people are finding it an increasingly challenging aspiration to achieve. In recent surveys, the statistics are pointing towards a growing number of people either delaying their property purchase of giving up altogether. However with good planning, you can get your foot on that ladder. One of the first and most important steps for getting into property is raising the deposit. Here are five tips to help you get started.
Get a finance assessment
Can you get the money from the bank? This will be one of the key determinates of how much you decide to spend on a property. Your first stop should be a mortgage broker to see how much you can borrow. This will determine where you buy, how much deposit you need to get, and how long it’s going to take you to get there. Without this information, you won’t really know what you’re aiming for.
Create a savings plan
Most of us need to start from scratch and build up capital over time to get a deposit together. Once you’ve had a finance assessment and know how much you need to save, you can create a savings plan to get you there. If you’re struggling to save enough, or feel that your savings are under-performing, reach out and ask for some help. A financial planner can be great personal trainer for your money!
If saving is taking you some time, it can be disheartening. This is compounded even more if you’re seeing the value of what you want to buy increase, putting it further out of reach. You may be tempted to blow some of your savings on a big holiday to make yourself feel better, but this will only put your further behind and leave you feeling worse. Keep your goal in mind and stay committed.
Tell someone that you respect about what you’re trying to achieve. This could be parents, friends, a manager or adviser. As you’re building up your deposit, you need to remain disciplined. If no one knows what you’re doing, you can only fail yourself. But if you make it public, you’ve got much more incentive to stay on track.
Think outside the square
These days parent loans or housing guarantees are becoming increasingly popular to help fund first property purchases. Willing parents can provide the equity in their home to either add to the deposit, or just reduce mortgage insurance on a purchase. If you want to consider this option, it’s a good idea to build up some savings first to demonstrate you’re well on your way and have the discipline to pay it back.