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2 simple tips for fast tracking your home ownership
12 November 2019
According to a Westpac Home Ownership Report from 2018 women are taking the reins on home ownership: 28 percent of us aspire to buy a home to live in within the next five years compared to 20 percent of men!
So, what happens when it gets down to the nitty gritty of saving for your first home.
Scary and depressing are emotions that come to mind. The whole process of getting a mortgage, finding a deposit, finding a property, knowing you can manage financially in the future can feel insurmountable and be very disheartening…
Changing your mindset from ‘impossible’ to ‘can do’ helps.
How to change your mindset
Each of us has our own mindset: a set of beliefs, values, assumptions we take into the situations in which we find ourselves. If you have an environmentalist mindset you probably try and save water, won’t use plastic, will walk or cycle when you can, etc.
If your mindset when it comes to buying a property is predominantly negative: start by examining what you believe is possible – focus on the positives you can achieve and dream about what you would like to own.
Research where you would like to live keeping your needs in mind. Look at the style of property itself – unit, house, land, family, single, etc. - the area, the prices, proximity to work, schools, family, friends, community, etc.
Read and talk to people who have bought about how they achieved property ownership.
Discuss what you want to achieve and how with friends, family, experts, home finance managers, for example.
Having reworked your mindset, you’re ready to tackle saving and budgeting.
How am I going to purchase my first home?
You need to establish the total cost of buying your new home.
Total cost of your new home = purchase price + other costs. (Other costs include rates, stamp duty, registration fees, solicitor fees, searches, inspection reports, relocation costs, insurance, loan application fees and utilities connections.)
You then subtract any funds you already have (either as savings or from the First Home Owners Grant (FHOG)) from the total cost to establish how much you need to borrow.
Amount you need to borrow = total cost of your home minus any savings or deposit minus your First Home Owners’ Grant.
It’s these financial aspects of buying a home that can be overwhelming. The tip from home finance experts is: Break the overwhelming down into baby steps.
2 easy steps to set savings goals
Establish your income and your outgoings - see where you are spending and where you are saving. Put it all together in a budget and decide how much you are going to save.
One of the underlying principles in budgeting is understanding where your money is going, because knowing where your cash is going helps you save, plug financial leaks and make better, more thoughtful purchase decisions.
Don’t expect this to come without pain. Simply, if you’re saving, you’re not spending, but it’s for the greater good – your new home.
How do I achieve my saving goal
Decide how much you want to save, the deposit, the deposit and more, etc.
Prioritise your goal, in this case how much you are going to save.
Set a time limit on the goal and from there work out how much you need to save a month, a week, a day to achieve the goal in the time you’ve set yourself.
Have a look at the task you have set yourself and assess whether it is achievable. Re-evaluate if it isn’t.
Set milestones of achievement and celebrate them.
Start the goal.
For more on buying your first home, see here.