Buying your first home may not be as easy as it used to be, but it’s definitely achievable.
By CHRIS ACRET
If you’re a first homebuyer who’s feeling a little discouraged, take heart because there are many ways to get a foot in the property market door.
It might seem a little old fashioned, but simply changing your ‘money mindset’, creating a savings plan and getting organised can put you on the road to owning your first home.
Save and get organised
First homebuyers building a deposit may need to change their money mindset from one of spending to one of saving.
Culturally, we’ve developed a long-distance relationship with money because we rely so heavily on credit, so we’re somewhat divorced from the process of spending money – it’s easier to buy a $200 item on a credit card than fork out $200 in cash.
Lenders are keen to see savings increase over time, so set up a savings account and make saving your new habit.
You can further boost savings by taking advantage of lenders’ bonus saver-type accounts and the Federal Government’s First Home Saver Account scheme.
It’s equally as important to pay all your bills on time and manage unsecured debt – like credit cards. This demonstrates to lenders that you’re reliable and able to manage your money well.
Also, reduce your dependence on credit as much
as possible. Depending on how many credit cards you have, you may consider cutting up all except one credit card and reducing the limit on that card to around $1000 to $2000.
Do your research and be informed
Get to know the property market and consider speaking with a mortgage adviser or lender to find out how much you can borrow.
Learning as much as you can is a great first step in helping you to set your property ownership goals, but be realistic and prepared to make compromises.
It’s easy to get caught up in the excitement, so temper that with the understanding that you’re entering the property market – not buying your dream home.
If you’re really keen to learn about absolutely all of the options available to you, speak with a lender or mortgage adviser about family guarantees or buying a home with a friend.
In short, a family guarantee allows a family member – usually a parent – to use equity in their home as security on your home loan.
It’s good to know there are many options available to first homebuyers.
• Be prepared to change your ‘money mindset’.
• Make saving a new habit and give your savings a boost with grants and co-contributions.
• Get organised and pay your bills on time.
• Check your credit history.
• Research and seek advice.
• Be realistic and prepared to make compromises.
• Consider a family guarantee or buy with a sibling or friend.
Chris Acret is the managing director of Smartline Personal Mortgage Advisers, which is a multi award-winning franchise group that has built a reputation for advice and client care. Around 85 per cent of Smartline’s business comes from personal recommendation. Visit www.smartline.com.au