Tips On Saving For First Home Buyers
Buying a home for the first time is not just a financial decision, it is also an emotional one. As with many emotional decisions that we make every day, it is easy to have clouded judgment. This article will give you some vital tips and guide you on how to make the right decisions so that your first home is the real asset you hoped it would be.
First are the things that you should do way before you buy a house:
- As soon as you get your first reasonable job, start saving at least 5% of your monthly income for your deposit. If you work just a few years, you will have a large enough chunk to pay off a deposit quite easily. The easiest way to do this is to set up an account which is automatically credited every month. It should be a high interest one, or at least one that gives bonus interest for consistent saving.
- Clear your credit card debt if you have any. Staying current helps you when you are looking at an institution to finance your first home purchase.
- Talk to experts; get a financial person and a real estate person who can give you the lay of the land; the more information you have, the better the decisions you will make.
Let’s assume that you have done all that and have bought the house; what next?
- Ask any questions you may have about the repayments and interest and make sure that you understand how everything works. Ask about hidden charges, like legal fees and stamp duty.
- Be ready for interest rate fluctuations; it’s unlikely that in the course of your mortgage interest rates will remain constant.
- Keep your credit card balance within limit at all times; you don’t want unexpected debt that could affect your payments.
- Any time you have extra money, pay it towards your mortgage. This means that when you get an end of year bonus, pay off part of your mortgage and then use the rest to travel and not vice versa.
- Keep an eye on your credit history at all times. In case of trouble, a clean credit history means lenders will be more willing to work with you.
- Check whether you are eligible for any grants and lots of first time homeowners forfeit grants only because they don’t know about them. The first thing you should know is that the government gives you $7,000 to get you started.
- You are now the proud owner of a new home and all payments are going according to plan. Keep it that way and before long you will be fully paid up. In case you are wondering about eligibility, here are some criteria that first time home owners have to meet:
- You must be a citizen or a resident to buy a home in Australia.
- Property means: a house, a home, an apartment or a flat that was designed to house people.
- You cannot claim a grant twice.
- You must be resident in the premises within 12 months of purchase.
- The $7,000 grant applies to a home, not an individual. This means that a married couple will only claim the grant once and not each separately. The grant must also be claimed with 12 months of buying the property otherwise it lapses.
- As a first time home owner, you are eligible for lower interest rates.
- If you are ready to pay mortgage insurance, you can forfeit the initial deposit on the property. It means that you borrow 100% of the property value and have to insure the loan.
Compared to other places in the world, Australian citizens get lots of help when they are buying their first homes. Make sure that you know everything there is to know so that you can use it to your advantage.