Saving for a house can be a monumental challenge for many Australians. Without a clear plan, or strategy, those trying to save can come up against some hurdles.
With that in mind, we’ve created this useful guide to give you some tips about how to save for a house deposit and get on the property ladder sooner rather than later.
First, work out the deposit you’ll need
Location, size, age, condition, and other factors can all impact a property’s price, which means you might need to compromise on some things in order to find a property with a realistically attainable deposit.
If saving a big enough deposit might be too difficult and you have a family member or friend who is willing and able to help you, it may be worth looking into a ‘guarantor loan’. This is where another person guarantees your loan – this means that they provide their own property (usually their home or an investment property) to secure your loan) and that they will step in to assist with or make loan repayments if you are unable to do so in the future. If you are considering taking out this kind of loan you should consider getting some legal advice.
If you’re a first-time buyer, you may be eligible to take advantage of the government initiative known as the First Home Super Saver (FHSS) scheme to help you towards the deposit of your home.
The FHSS scheme provides benefit in that it allows you to save money for your first home inside your superannuation fund faster and with the concessional tax treatment of super.
To learn more about the FHSS scheme and eligibility criteria click here.
Create a realistic budget you can stick to
Creating a budget is all about setting realistic goals and cutting out the unnecessary spending that we’re all prone to from time to time. So, work to set a limit on your monthly outgoings by examining your spending habits to determine what luxuries can be cut out.
For example, if you have a goal to save $15,000 over 3 years you’ll need to save approximately $417 per month. This will be the goal you need to aim for every month, without exception.
But, remember to adjust the amount you place into your savings each month if you experience a sudden increase in wealth, such as selling an asset or being awarded a promotion at work.
Learn about how you can protect your home once you’ve gained your deposit
Working out how to save for a house deposit is your first objective, but it’s important that you protect your ability to pay your mortgage repayments once you’ve saved a deposit and purchased your property.
Thankfully, a Loan Protection Plan from ALI Group may enable you to stay financially secure if you suffer a serious life event that prevents you from earning an income.
To discuss the best way to save for a house or for further information on how ALI could help you protect your home, please speak to your local ALI-authorised mortgage broker today or alternatively, request your home loan protection quote here.
Loan Protection Plan is jointly issued by Hannover Life Re of Australasia Ltd ABN 37 062 395 484 (Death, Terminal Illness, Living and Accidental Injury Benefits) and QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239545 (Involuntary Unemployment Benefit). It is distributed by Australian Life Insurance Distribution Pty Ltd ABN 31 103 157 811 AFSG 226403 (ALI). ALI receives commission for each policy sold. Any advice provided is of a general nature only and does not take into consideration your personal objectives, financial situation or needs. You should consider the Product Disclosure Statement when deciding if this product is appropriate for you.