Saving for a home deposit doesn’t need to be a long drawn out process that takes forever to achieve.
There are smart steps you can take now to ensure you get on the property ladder sooner rather than later.
Everyone needs to start somewhere so it’s important to plan ahead. Take the right steps now and your first home ownership dream can become a reality.
Tip No 1: Establish How Much Deposit You Need And Set A Goal
Work out how much you are looking to spend on a property. Saving at least 5-10% of the purchase price is a good starting point for your first home.
You may need to cut back on your lifestyle in order to save the amount needed on a monthly basis. Doing this will enable you to save your deposit much faster.
Set up a direct debit so it is automated. Whatever is left over is what you have to play with for the month.
Tip No 2: Consider Teaming Up With Family Or Friends
This can fast-track the time to save for your deposit by pooling your funds together if you are currently single and only have 1 income coming in. This will also boost your borrowing power when applying for a loan as there are multiple incomes and has proven to be a great way to enter the property market when you are first starting out.
In many cases, it is impossible to do it on your own so it’s not uncommon these days to consider other options that will get you into the property market sooner by teaming up with others to make your first property purchase sooner.
Tip No 3: Fast Track Your Savings By Using Your Superannuation Account
In 2017 the Government rolled out the First Home Super Saver scheme (FHSS) to assist first home buyers by allowing them to save for a deposit FASTER than they would be able to using their net salary in most cases.
The FHSS Scheme allows you to save money for a first home inside your superannuation fund. This will help first home buyers save faster with the concessional tax treatment within super.
This plan allows first home buyers to salary sacrifice up to $30,000 into their super account at a maximum rate of $15,000 a year. If done as a couple this would amount to $60,000 + associated earnings after 2 years if each individual put in $15,000 a year over 2 years.
From 1 July 2018, you can then apply to release your voluntary contributions, along with associated earnings, to use as a deposit to help you purchase your first home.
You can apply for the release of voluntary contributions up to a maximum of $15,000 from any one financial year and $30,000 in total across all years.
There are strict eligibility criteria and requirements so it would be best to seek professional advice to see if you qualify.
Tip No 4: Get Family Help With A Home Loan Deposit
Getting help from your parents to guarantee your loan is by far the most effective way of borrowing 100% of the purchase price!
Your parents can help you by using the equity in their home (Parental Guarantee) to use as the deposit which will enable you to enter the property market much sooner, save money by reducing or avoiding the need to pay Lenders Mortgage Insurance (LMI) and reduce the loan to value ratio (LVR).
The Parental Guarantee is for a portion of your loan amount, not the whole amount of the loan.
Call us today for a free chat with an experienced mortgage broker and make your first home purchase a reality.
Disclaimer: Your complete financial situation will need to be assessed before acceptance of any proposal or product.
Clint Thomasson
Clint has over 14 years experience in Financial Services working with major corporates including NAB, AMP, ANZ, and AXA. With a passion for Mortgage Broking, coupled with his outstanding interpersonal skills, Clint’s drive is all about matching your needs with the right financial solution. Whilst many businesses offer Finance Broking services, the difference you’ll find with Clint is his ability to listen, engage, retain knowledge and accurately match your requirements. Not only that, but he’s also a very friendly and genuine person with a great work ethic – you’ll have full confidence that he will deliver in a timely and highly efficient manner, every time.
