For many Australians, the dream of home ownership is becoming more elusive. However, there are steps you can take to help you achieve your goal. These steps improve your chance of success and enable you to set milestones so you can work towards home buying. Let’s look at these four important steps now.
The first step to achieving any goal is to write down what you wish to accomplish, so you stay focused. In fact, studies indicate that by writing down a goal your chance of success increases by as much as 42%.
So, how can you apply this tactic to buying a home?
Firstly, look at how much you can afford to borrow based on your income. Next, look at homes for sale and narrow down the property type based on your budget. Then, write down a list of home requirements such as:
- Number of bedrooms and bathrooms.
- Car parking needs.
- Land size and amenities.
- List of suburbs or towns where you’d prefer to buy property.
- Your budget.
This list then becomes your checklist when you begin your home search. It can also be a good idea to get home loan pre-approval before you start searching for a property. Pre-approval saves you any disappointment.
By writing down how you’re going to achieve your goal, you can stay on track, and avoid any setbacks. Plus, these ways will make you more disciplined and help you to maintain a realistic outlook.
While you can dream of owning a Sydney Harbour penthouse, it’s unlikely this will fit within a first-home buyer’s budget. Therefore, by focusing on what you can afford, you’ll maintain your level of enthusiasm and keep on track.
Consequently, to achieve your goal of buying a home this year that’s within your budget, then you’ll need to write down the following:
How much you’ll need as a deposit.
The minimum is 20% if you wish to avoid paying Lenders Mortgage Insurance (LMI). For example, 20% of $600,000 is $120,000.
Just how much you’ve already saved.
If you have started saving then estimate how much you’ve accumulated. For instance, if you have $33,000 in one investment account and $25,000 in another, and your partner has saved $28,000, then this adds up to be $86,000. Subsequently, you need to save another $34,000.
Work out how to save the funds needed.
Whatever amount you need to save, consider how to reach this goal within the next 12-months. Thus, to save the required $34,000 in 12-months, you’ll need to bank $607.14c weekly. As a result, you look at your weekly wage, and you can put aside $250 weekly, and your partner $200. Hence, you can save $450 per week, so you need an extra $157.14c to make your dream a reality. To make up the shortfall, you sell your second car, which covers the gap and gives you money towards stamp duty and other fees.
Once you’ve set yourself a goal and steps to achieve this, then stick to these. Careful planning is extremely important. You also need to start searching for the property so you keep an elevated level of focus. Furthermore, this will give you a feel for the market, so you learn what represents value for money. Also, attend open inspections and auctions to get a taste for real estate and the market in general.
There is a lot of information about home buying available. Accordingly, make sure you do research and read as much as you can. Talk to real estate agents at open inspections and auctions. Plus, ask your mortgage broker questions to become familiar with the home buying process.