The average first-time homebuyer in Australia is a very unique demographic. The average homebuyer is between 31 and 33, married, and about half have children. Most couples buying their first home in Australia have two incomes, about 75% have a professional trade certification and about 36% have a bachelor’s degree or higher.
If you are one of these people, let’s take a look at some tips that can help you start achieving the financial goals that you need to get approved for a first mortgage.
Start Writing Down a Few Goals For Your First Home
Start thinking about the different areas around Melbourne where you will want to live. Also, start creating a budget. The average weekly housing costs (including mortgage, home insurance, and other home ownership expenses) are about $491 per week in Australia. Also, start thinking about how much money you are going to need for a downpayment on your home.
Some lenders will be okay with a 5% downpayment while other lenders may require a downpayment that is as much as 20%. In the long run, it might be good to save up the 20% down payment because you will have a smaller monthly payment on your mortgage. If a new home in Melbourne costs $737,000, the smallest down payment you should plan on making will be just under $40,000.
Work On Saving Towards a House
There are many different ways that you can work on saving towards a house. Some of the more traditional methods involve cutting unnecessary expenses and finding a second income for your household. One opportunity is a high interest savings account. Over a period of time, you can save up enough money to put towards a downpayment. Term deposits are also a way that you can save for your home.
If saving towards a home is going to take too long, there are also some resources that are available to you. In some areas of Australia, you can qualify for as much as $20,000 in grants towards your first home purchase. There are also things like managed funds that can help you grow your savings over time. If you are trying to save $40,000 for a downpayment, you can easily reach your goal by saving $1110 per month for a period of 36 months.
Evaluate Your Priorities By Speaking With a Mortgage Broker
Start speaking with a mortgage provider right away when you are on the market for a home. A good mortgage provider will be able to evaluate your finances, find out what type of home is appropriate for your budget, and work with a network of lenders to give you a quote. Stark Finance, a leading mortgage lender in Melbourne, can work with a network of over 40 lenders to find the right financial product for you.
Develop A Budget
Know what type of budget you are going to have once you enter your new home. In Australia, the average weekly household expenses are about $491 per week. That’s on the low end for a smaller home. Depending upon where you live, your monthly mortgage payment could be as much as $2,500. Once you understand how much your home will cost, you can then put other priorities around that, such as your car payment, food, utilities, and other expenses. Once you own your home, you can start working with Stark Finance to put more payments towards your principal so that you can pay your home off faster or refinance if a better rate comes along.
Look Into Ways To Get Money For Your Home
There is a program in Australia called the First Home Loan Deposit Scheme that can potentially help a new homebuyer get money for their home faster. During any given fiscal year (such as July 2021 to June 2022), only 10,000 applications are placed. How this program works is that it allows homeowners to have a smaller downpayment (as low as 5%). The National Housing Finance and Investment Corporation guarantees up to 15% of the property value. The smaller down payment can help first time homeowners get into a home faster.
Monitor Your Progress
Keep track of your financial goals when it comes to buying a new home. You might want to create a calendar that shows all the milestones that you will need to meet financially. If you are trying to save for a home, depending upon your down payment, it could take anywhere from 2 to 6 years. The average homeowner will take about 6-½ years if they are saving for a 20% downpayment.
Work Towards Clearing Your Debts
Whenever you’re working towards creating a strategy and setting up goals for achieving financial success such as buying a car or a house, you’ll need to first begin clearing out your debts. If you have any existing debt, it’s crucial to try and work towards clearing those as soon as possible. Calculate the percentage of your income that you know can be used towards paying off your debts. It’s better to go ahead and remove these as soon as possible before aiming towards larger purchases. Some debts can be paid off quickly, like a car payment. That car payment can then be used as savings towards a downpayment.
Know That It’s Okay To Reach Out For Help
Stark Finance has all of the resources needed to help you get your first home loan. We have a network of over 40 lenders that we work with to get you the right financing product. We can also help advise you on the amount of time you will need to save towards a downpayment. We can even educate you on government programs in Australia that can help you get into a home faster. If you are worried about approval, it’s worth giving Stark Finance a call. We have a 95% success rate on approvals for all of the mortgage applications that we initiate.
We also have programs for existing homeowners, such as refinancing and home loan optimization, a program that helps you pay off your home loan faster.