Saving up a deposit to buy a home can be a daunting task. As much as you might want it to be a sprint to the finish line, it’s really more like a marathon, where taking it slow and steady can be the best way to achieve your goal.
This means getting prepared, doing your research, making decisions thoughtfully, and avoiding the temptation to rush into it. The more time you put into getting fully prepared, the better positioned you’ll be to manage your home deposit successfully.
Read on for our suggestions to help you navigate the process.
A good plan can make or break your savings goals. This means making a budget and sticking to it. List all your weekly expenses (e.g. rent, food, and entertainment), your monthly expenses (e.g. internet and phone) and any other expenses (e.g. electricity bills). It can be very helpful to use a budgeting app to get to know what you spend your money on.
Remember, you can’t stick to a budget that’s not realistic, so be honest with yourself during this process. If you find your budget isn’t working, that’s ok! Just go back and revise your budget based on this experience. Find out why you overspent and factor that into a new goal.
Secure the right loan for you
Lenders place certain requirements on customers before they’ll approve a loan. Each lender’s requirements may be similar in major ways, but specific conditions vary. For example, some lenders require proof of a longer savings history than others.
It is important to remember that you might not want to choose the lender that lets you get the loan the most easily. You don’t want to jump into an investment that you aren’t ready for. Ask your family and friends about their experiences with lenders, conduct research and use websites that help you compare different home loans.
And no matter how much work you’ve done, make sure you always…
Seek professional advice
Quality professional advice is highly valuable for all home buyers. While it may be tempting to avoid the extra cost of seeking professional advice, the cost of not being properly advised might end up costing you a lot more.
We suggest spending some time meeting with a professional financial planner and taking their advice on board. They will help you to understand your current finances, your options going forward, and the best strategies to use to manage each stage of your home loan.
Real estate agents offer valuable resources and guidance, so make sure you meet with a number of different ones to find which one works for you.