Careful planning and budgeting are essential when it comes to being able to afford your own home:
Finance and deposit:
Setting yourself up with saving goals and speaking with your bank is an excellent first step when considering purchasing your first home. Lenders generally require a deposit of 10-20% of the amount you’re borrowing or more. Therefore if you’re buying a house worth $400,000 you’ll need to save a deposit of at least $40,000.The larger your deposit the less interest you will pay in the long term. Work out how much you need to save; the difference between what your mortgage payments could be and what you’re currently paying in rent gives an idea to you and your lender about how your budget will be able to cope.
Obtaining a mortgage/first home loan:
One of the most important financial commitments you’ll ever make, choosing the right home loan with interest rates and flexibility to personally cater to your needs is paramount. There are many types of mortgages, all with their own pros and cons. Shopping around for the right one takes time, this is where a mortgage broker comes in handy with services that are usually free.
Keeping money aside to pay for moving-in costs is ideal, such as moving truck fees, connection fees for power, internet and phone, advertising for flatmates and tenants and builder’s reports and legal expenses.
Ongoing costs including (but are not limited to) rates and body corporate fees pop up every year. As a home owner, these costs are compulsory to pay. Check with an agent about rates before putting an offer in on a property, or look them up on a local council website to see if you can afford them.