With Melbourne metro’s median house price soaring to $649,000 as of 30 September this year, it can be a daunting thought for those first home buyers wanting to take that first step on the property ladder. There is never a wrong time to enter the property market, just a right time for you. If you’ve got your heart set on one of Mimosa Homes’ great house and land packages, here are a few pointers to saving that crucial deposit and making your home ownership dream a reality.
Make a plan
As the old saying goes, “Those who fail to plan, plan to fail.” This is no truer than when saving for your first home deposit. Gone are the days of a bank lending you 100% of a mortgage as you walked into their establishment. Now they want to see a regular savings pattern and steady employment before they’ll even consider your application. So with the onus on you to prove your worth, where do you start?
Set a savings goal
How much should you set as a target? You should start by setting aside 10% of your income into a high interest savings account or term deposit. Shop around to find one that suits. Calculate how much you currently pay in rent and add in how much you can afford to save each week. This is how much you can afford to repay. Don’t forget to calculate in the other costs of home ownership, such as rates, insurance and repairs.
Eliminate bad debt
Although not technically saving, paying off outstanding credit card debt is a must before committing to a savings plan. Not paying 18% interest on a credit card is the same as saving 18%, so add this to your budget and eliminate credit cards from your household if you can.
Earn extra cash
Get a job. Oh, of course you’ve already got one. Well how about another? Putting in the hours on a part-time evening or weekend job may bring you in another $12,000 a year, a tidy sum towards that home deposit. You could turn a hobby into income or clear out that unwanted clutter in the garage or attic. Putting items up for sale on eBay or Gumtree could reap you hundreds.
Send luxuries packing
Now is the perfect time to quit any vices. Smoking, drinking and regular restaurant meals are costing you a small fortune. It’s not fun thinking about downsizing your lifestyle but imagine all the money you can save towards that precious deposit. Make grocery shopping lists to avoid impulse buys. Don’t window shop for clothes to avoid temptation, and start taking your lunch to work and avoid those expensive takeaway coffees. Maybe you could start a ‘vice’ jar at home. Every time the temptation to spend hits you, place the money in the jar then transfer it to your savings account.
So if you want to reward your savings with the best home in Melbourne’s west, contact Mimosa Homes today.