Forward-thinking, helpful financial breaks and clever tricks can help get you ahead and into your own home faster.
SAVING THAT DEPOSIT
Assess costs
Work out how much you earn versus how much you spend. For a month, write down every item you buy.
Be honest and you may be surprised how much you can save. For example, cutting back two takeaway coffees a day could save you about $200 a month.
Begin budgeting
Your budget may need to be strict, but make sure it’s achievable, too. Get into the habit of long-term saving by putting away an amount similar to your predicted home loan repayments. Consider organising a monthly automatic direct debit.
Be realistic
Starting small is a good option. Calculate how long it will take you to reach your goal and consider choosing a different price range, suburb or house if it’s longer than you’d like. Keep in mind there may be other upfront costs, including Lenders’ Mortgage Insurance if you don’t have a deposit of at least 20 per cent.
FINANCIAL BREAKS
First Home Super Saver Scheme
This new federal government scheme allows first-home buyers to save money for a property in their superannuation fund. From July 1, voluntary contributions of up to $15,000 in one financial year can be released towards the home purchase.
First Homeowner Grant and stamp duty savings
Eligible first-home buyers buying or building a new house valued up to $750,000 in metropolitan areas receive a $10,000 grant. If buying or building in regional Victoria, the government grant has been increased to $20,000. First-home buyers are now exempt from paying stamp duty if the house costs less than $600,000, and will pay less stamp duty on properties up to $750,000.
HomesVic Program
Launched in February, this scheme gives about 400 first-home buyers the opportunity to co-purchase a home with the government. The state government reduces the initial deposit by taking an equity share of up to 25 per cent. Buyers must have a 5 per cent deposit, and the government will reclaim its share of the equity when the property is sold.
Parents Assist loan
Mum and Dad can now help out with up to 20 per cent of a deposit under a “parent assist” loan. The formally-structured arrangement eliminates the need for a guarantor and still allows first-home buyers access to the First Home Owner Grant and stamp duty concessions.
GETTING A HOME LOAN
Clear debts
Owing money doesn’t rule you out of the homeowning game, but it’s wise to try clearing or consolidating your debts first. The latter will help limit you to paying only one set of interest rates, and banks should look more favourably upon your home loan application.
Do your research
Ask each lender for a fact sheet, so you can compare loans. These will cover interest rates and fees, any features as well as the total amount to be repaid.
The big picture
Make sure you look at the package as a whole, rather than focusing on one home loan feature. For example, some loans may have a low interest rate, but you could find the fees are higher somewhere else to compensate.
Consider pre-approval
While it’s fun to look at houses, you should spend more time working towards your savings goal. Seek pre-approval from your lender before you head out to snap up a bargain. You’ll be conditionally approved to borrow up to a certain amount, and given peace of mind knowing the pre-approval is valid for three to six months while you find your home.