The comments in the news are enough to make you think saving a deposit for your first home is mission impossible. Not true!

So, rather than just encouraging you to stop buying #SmashedAvo breakfasts to save your deposit, we’ve put together some practical tips to get your savings account over the finish line. We may even be able to tell you about some recent changes to the first home owner grant and stamp duty that could help, depending on where you are looking to buy. With a solid budget, a few lifestyle tweaks and some help from us to determine how much of a deposit you’ll actually need, you could soon be attending open home inspections looking for a fantastic new pad!

Tip #1: Create a budget

Our first tip is to have a savings plan and stick to it. Create a budget, separating your ‘needs’ from your ‘wants’, and work out how much you can put aside every week to reach your goal. Remember, lenders will want to see a solid savings history, and depending on the type of property you intend to buy, this could be just as important as the size of your deposit.

It’s important to include ‘fun’ money in your budget, but if you’re serious about saving up a deposit you may have to consider cutting back on extras. There are plenty of great tools to help you get started, such as the TrackMySPEND app, whereby you can nominate a spending limit and track your progress, or the Pocketbook app, which connects to your bank and automatically tracks your income and expenses. Once you get going, you’ll find it very satisfying to watch your nest-egg grow. Chat to us and we’ll help you set up an effective budget.

Tip #2: Change your spending habits

Try to be proactive about saving. For example, take lunch to work rather than eating out, or challenge yourself to stay fit by running or exercising at home rather than spending money on a gym membership. Need entertainment? Borrow books or DVDs from your local library or have friends over for a pot luck dinner. Need clothes? Organise a clothes swap party or find a bargain at the nearest op shop. Need tools? Ask your parents if you can borrow theirs. Shopping around can also help you save, so whether you’re buying groceries or electricity, compare prices and make a point of finding the cheapest option – it can be fun!

Tip #3: Become a “super” saver

As of July 1, aspiring first-home buyers will be able to make up to $15,000 of voluntary contributions into super each year, or $30,000 in total, to put towards a deposit and benefit from the tax breaks. Talk to us and we’ll explain the changes.

If this is not the option for you, there are other ways to maximise your savings. You could open a term deposit or a high-interest savings account that rewards you for depositing money and not taking it out. You may even consider investing in shares to grow your savings. It’s a good idea to talk to a financial planner about how you can make your money work harder for you. Chat to us and we can refer you to a reliable professional.

Tip #4: Speak to us now, even if you don’t think you’re ready to buy

We can help you to create a budget and explain any financial assistance that’s available. Recently, there have been changes to stamp duty concessions and exemptions for first-home owners in some states, as well as to the First Home Owner Grant, so check in with us to see what you’re entitled to. Maybe you won’t need the 20% deposit – ask us about other options like paying Lenders’ Mortgage Insurance to secure a home loan with a smaller deposit, or asking a family member to use their equity as security for your loan and go guarantor. We can also explain how to check and tidy up your credit report, which lenders will want to see when assessing your home loan application.

Tip #5: Consider property options that may require a smaller deposit

Your first home may not necessarily be like your mum and dad’s place – most people have to start small and work their way up the property ladder and that’s OK. To break into the market, you may have to consider less expensive properties such as apartments or renovators’ dreams. How much deposit you’ll need will depend on what you want to buy and your financial circumstances, so talk to us and we’ll help you review all of your options.

As your mortgage broker, we can help you with everything from saving the deposit, to finding a suitable loan, given your personal financial circumstances and goals. We may even be able to help you find the right area and property. Please give us a call today – we’d love to hear from you. And if you do find yourself feeling disheartened, remember the words of the great Nelson Mandela, “It always seems impossible until it’s done.”5 Tips for saving a deposit for your first home

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Summer is here and Christmas is just around the corner. Our last newsletter for 2016 focuses on maximising those New Year car sales, investment loans and becoming a good landlord, and how you can apply some damage control to your Christmas spending.

The Reserve Bank of Australia (RBA) has met for their final meeting for 2016, and announced the official cash rate will remain unchanged at 1.5 per cent. We last saw rates fall in May and August this year, which brought the official cash rate to its lowest level in Australian history. The RBA will not meet again until February 2017, so the cash rate will stay at this record breaking low level at least until then.

There is a great deal of speculation about what the RBA’s next move will be. Some forecasters anticipate that rates will now stay on hold until later in 2017 and then start to rise as inflation improves. Others are predicting continuing low inflation and soft wages growth may influence another RBA cash rate cut to as low as 1.0 per cent next year, with the first cut coming as early as February next year. Either way, we can expect to see these very competitive home loan rates in the market for some time.

Regardless of what the RBA decide to do, lenders have been varying their rates outside of the RBA’s rate movements. Over recent weeks we have seen quite a few lenders increase their fixed rates, so if you are considering fixing some or all of your loan, now might be a good time to talk to us.

We are also seeing a more noticeable variance in the rates that are being offered by different lenders in the market. So if you have a current home loan, it’s worthwhile getting in touch to determine if your loan product is still right for your needs.

2016 has been a fascinating year. Global economic influences and developments in the US, such as the election of Donald Trump to the presidency, have caused a bit of uncertainty in the market. But overall it has been a strong year for home values here in Australia. From January to October this year, capital city home values grew by 9.1 per cent. Perth and Darwin are the only cities where values have fallen slightly for the first 10 months of the year.

Compared to the same time last year, combined capital city home values have increased by 7.5 per cent. This is trending up from 6.1 per cent at the end of July this year, with house values growing slightly higher than unit values across the country.

Summer is usually a slower time for Australian property markets, with much activity coming to a standstill over the Christmas period. However, the market activity in most of our capital cities is still quite strong.

According to Australian Property Monitors (APM), Melbourne listed 1173 auctions on Saturday 3 December alone, with a clearance rate of 80 per cent. Sydney also had a strong clearance rate of 76 per cent from 874 auctions on the same day. Other cities with strong auction numbers included Adelaide (160 auctions), and Brisbane (148 auctions), and even Canberra (with 81 auctions).

2016 has been a positive year in our property markets, and this looks set to continue into 2017! With the low interest rates we are seeing at the moment, it’s a great time for those in the market to purchase property, whether you’re a first home buyer, investor or refinancing an existing loan.

As this is our last newsletter for 2016, we’d like to take this opportunity to wish you and your family Merry Christmas and a safe and happy festive season. Thank you for your support throughout 2016, it’s been a big year for everyone, and we’re sure you’re looking forward to the break as much as we are! Thank you once again for your ongoing support, and we look forward to connecting in the New Year.

Information sources:
Home values: www.corelogic.com.au
RBA: www.rba.gov.au


Copyright 2016