Monday 27th January 2020
Saving up for a deposit on your home loan can be one of the hardest things you do financially. A home loan deposit requires a large amount of money and many Australians don’t have that amount of money just lying around. Fortunately, there are several amazing tips that will make this process much easier.
Figure Out What You Can Afford
It will save you a lot of time and energy if you have a good idea of the amount you will need for a deposit on your home loan before you start saving. Before you can determine this, you need to determine how much you can afford to borrow as that will influence the deposit amount. This will differ from person to person but looking at your spending habits and financial position will help with calculating this.
Make a Budget
After you’re aware of how much you spend on a regular basis look at areas where you could cut back and potentially spend less. Take these savings into consideration when making your budget but make sure that sticking to it is sustainable over the long term. One thing that can be helpful is to save a similar amount each month to what your monthly repayments would be.
Clear up Your Debts
Taking care of all your debt will not only help you to save more every month, but it will also help your credit score when you do decide to apply for a home loan. Consolidating your debt or rearranging it so it’s easier to manage will make your life a lot easier when you’re busy trying to manage your budget and savings.
If you’re struggling to trim the costs off your monthly spending, there are several things you can do that will significantly speed up your saving. Moving back in with mum and dad, staying in and catching up on tv shows instead of going out and going on road trips instead of overseas holidays are great ways of significantly improving your savings.
The larger of a deposit you manage to save the less you will have to spend on interest and Lenders’ Mortgage Insurance. Stick to your budget but don’t be afraid to make some adjustments along the way.
Hopefully, saving for your deposit will seem a lot less daunting now that you know these 5 tips.
If you would like to learn more about saving up for a home loan deposit get in touch with us today.