Still hesitating whether you should start planning (or even buying) your first home because you’re still at your 20 and “young”? Stop thinking about tradition and start your journey to investing in your own life through home ownership.
To all those Millennialsand Gen Yersout there, you’ll be surprised that different generations wishthey had entered the property market sooner.You bright, courageous 20-something can start dreaming and moving towards buying your own home or at least, start on the path to doing so. Here’s how to start:
Start saving and spending responsively. Saving for your home is predictable, sure, but it’s the key to getting into the property market. Starting to save now doesn’t automatically have to mean eating noodles for a long time, having no social life, or skimping on the things you love.
Start researching on the best bank accounts – basically those with high-interest rates. Take note that this is often fixed term. Find those with rewards for deposits and with low or no penalties for withdrawals. Regularly deposit money directly into that high-interest account. This can be a percentage of your pay. This way, you won’t be tempted to spend it and be sure that any ‘extras’ such as money gifted, tax returns, or work bonuses goes straight into that account as well.
Save as you rent.You know this already, but as a renter, you are helping someone else pay off their mortgage and it makes no sense! Why not rent your hard-earnt pennies to you?If you really need to rent, you can consider living with a family member or a good friend.
This way, you can lessen rent. You can also consider the more affordable option of going for a shared housing to keep both rental and utility costs down. Put your goal in mind even though the most frustrating of situation. Just focus on your savings as well as the long-term benefits of owning your own home.
Consider asking parents for assistance. A survey in 2016 revealed that around 25 percentof Gen Yersasked assistance from their parents. Take note that it wasn’t just small change as well. The average amount that is being contributed by parents for a home deposit was around $80,000. If your parents can’t assist you financially, it’s also possible to co-sign the home loan as guarantors.
Consider the suburbs. Basing on your budget, your first home purchase can be an investment. Many new homebuyers opt for properties in the outer suburbs and start to rent out their property, which is called rentvesting. The goal here is to create a healthy deposit through rental income from the investment to purchase something more suitable later. Properties gain value over time.
You can find the fixed rate home loans in Australia through Newcastle Permanent Building Society, who offers it along with loads of extra benefits, some of which includes fixed Rates for 1 to 10 years, additional repayments of up to $25,000 p.a., fixed repayments, $0 application fee for personal and car loans, $0 annual value+ credit card fee, redraw, plus discounts and benefits available on other products.
It goes without saying that there is much research you need to do as well as help available to as you venture into the mortgage world. Take heart knowing that the majority of first home buyers are in the same boat. Keep at it and stick to your goals. Best of luck!