Spas A Adelaide in partnership with our friends from Mortgage brokers Northern Beaches presents:
Tips For Saving To Buy Your First House
Buying a house is something that a lot of people dream about, but this has become increasingly difficult for first-time buyers. Saving up to buy a house can be a daunting task, but there are a number of tips that you can use to help. It is important that you consider these tips as they could make saving to buy your first home much easier.
Start Saving As Soon As Possible
When it comes to saving up to buy a house, it is never too soon to start. The longer you save, the larger the initial deposit you will have and this is very important. Larger deposits will bring better rates and will lower the amount that you have to repay. It is also important to note that you are not only saving up for the deposit.
There are a number of other costs that come with buying a house that you need to have money to cover. Some of the costs that you need to cover will be the legal fees and moving costs. Depending on where you are buying a property, you could also be faced with stamp duty or a transfer tax. You need to save up to cover these costs along with the deposit.
Know How Much You Need To Save
One of the keys to saving up for your first home is knowing how much you actually need to save. There are some mortgage lenders who require that you pay only 5% of the total price of the property as a deposit. However, if you were to save 10 to 20% of the total price, you will gain access to better mortgage deals and you could get a higher loan amount.
When you know how much you need to save as a percentage of the total price, you will be able to calculate how much you need to put away each month. To do this, you will first need to find out what the average home prices are in the area that you want to buy. It is important that you remember these prices are likely to increase during the time that you are saving so you need to be flexible. You should then calculate what 20% of the total price will be and then determine how much you can realistically put away to reach this amount in a fair amount of time.
Where You Save
Where you have your savings is very important because it will impact how quickly you could save the amount you need. If you are looking at a short-term savings plan, you should consider a regular savings account. These accounts will generally require you to put in a certain amount of money each month to maintain the interest rates and you will generally not be able to withdraw without notice.
If you are looking at a long-term saving plan, you should consider fixed rate bonds. You will need to invest a set amount and determine the term. You will not be able to touch the money for this term, but you will be able to compound the interest to earn more.