Follow these tips to help you get started:
- Set a budget so you know exactly where your money goes. Knowing where you spend your money on can help you pinpoint areas where you can save.
- Pay off your credit card debt as soon as possible. You will stop paying interest and you will be more conscious of not overspending.
- Arrange direct debits to savings accounts. Have a separate, nominated savings account where automatic payments can go in. Maybe you won’t miss the money, if you don’t see it.
- Find the right savings account. Choose either a high-interest savings account or an account that gives bonus interest as a reward for saving.
- Get professional advice. Before starting anything, do some research and consult with a legal and financial advisor. Mortgage brokers can present you with options and help you get more focused.
Tips to Put you on Savings Mode
Below are tips to put your mind in the right place:
- Don’t take out a loan that you won’t be able to pay off. Borrow a smaller amount and you will pay less interest and low repayments. Borrow an amount that you know you can afford to pay back.
- Prepare yourself for changes in the interest rate. Take note that your mortgage repayments will increase if interest rate rise.
- Don’t hesitate to inquire about fees and charges. Items like stamp duty, conveyancing and administration costs will also be included in the amount of money that you will need to purchase your house.
- Know what your credit card balances and limits are so you know if you can make the repayments.
- Pay the mortgage on time to keep your credit history in good status.
- Watch out for costs such as stamp duty and legal fees. You may be unaware of these costs – that’s why you need to clarify what costs are involved. This is where a mortgage broken can assist you.
- Find out if you are qualified for a government grant to help you in your first home purchase. Australia’s various state and territory governments have additional eligibility requirements, such as periods of occupancy and minimum age limits.
Search for the Best Rate
Different banks have different rates and lending agencies have specials and offers now and then. Ensure that you grab the best deal for you. When you’ve put your name on a mortgage, don’t hesitate to call every few months to inquire about better deals. Rates could decline, but you may not hear about rate cut savings unless you ask your lender.
You’re not Stuck Even if your Main Priority is Reducing Debt
Hundreds of home loans are available; you can save thousands of dollars by finding the one with the right features. A financial expert can assist you in:
- Considering package loans that provide rate cuts for the duration of the loan
- Searching for loans that allow borrowers pay above the minimum monthly repayments at no extra costs
- Considering an offset account, a transaction account that is connected to your home loan. The money deposited to your savings account lowers the amount of interest you need to pay. As the money in the savings account grows and the longer it is left alone, the less interest you pay.
Get Loan Pre-Approval before Starting your Search
Attending an auction, or close to making an offer? Getting your loan pre-approved will allow you to remain on budget and on course when the pressure increases.
However, take note that pre-approval is only granted if you have met certain conditions.
Be Aware of the Hidden Costs
The sum you will really need to pay for your house will include items such as stamp duty, legal costs, government fees, building inspections, insurance, moving costs, utility connections and council rates.
Make sure to create a detailed budget that factor in all possible costs when you are buying a house. Modify it again and again so you are prepared for nasty surprises.