The first deposit of every mortgage may possibly be the most important and expensive payment of your life. This first payment sets the entire payment scheme that you have to make as the years go by. The bigger the deposit you are able to make, the less you’ll have to pay every month. And the best way to do that is to start saving right now.
Start Budgeting, Setting Goals, and Financial Planning
You’re not going to hit the marks on your first deposit if you’re going into things without a financial plan and goals. Most mortgages will ask you to give a 20 percent deposit, which is a big chunk of the price of the home.
Difficult? Yes. Impossible? No.
Start things off by listing down your expenses. Budget your monthly income starting with how much you spend on essentials. That includes bills, necessities, or funds that need to be taken care of ASAP.
After you’ve allocated money for the necessities, budget for savings towards your goal amount for your home deposit. It has to be the biggest chunk after your basic needs factored out. Leave a good amount for emergency funds—preferably at least ten percent until you have enough funds to last you several months—and the rest for leisure.
Make sure to set an achievable goal within a span of time.
Look into the New 5 Percent Deposit Scheme
The First Home Loan Deposit Scheme is a new plan that allows first time home buyers the chance to get a deposit at five percent. It was devised by the National Housing Finance and Investment Corporation (NHFIC) in partnership with a number of lenders.
As good of a deal this is, it is only limited to a number of people. So if you want to apply for it, you better be prepared. If you can, still try to save for that 20 percent mortgage and apply for this anyway. That way, if you don’t get accepted you’re still ready to make the 20 percent. But in the chance that you do get it, at least you have some extra money kept away.
Set Your Savings on Autopilot
If you’re the type of person that doesn’t have the time to consciously look at their savings, then set your bank to automatically receive money into your savings account. That way, there’s no excuse for you to “forget” to deposit.
Pay Off Debt
It may seem counterintuitive to let go of money to save money, but this will do a great deal of good for you in the long run. The lower you can get your debt in other areas, the better chance you have of getting a mortgage plan that is more manageable.
If you’re in no rush to move out, it’s recommended that you try to hit a good savings percentage before hitting the target. But if you’re in a time constraint, you need to put your pedal to the medal and save every dollar that you can and meet with a competent mortgage provider that will help you every step of the way.
Are you ready to buy the house you’ve been eyeing? Then you need to put your deposit in the hands of one of the best mortgage companies in Sydney. Wealthy You is an established Australian mortgage company that has over a decade in service and a variety of mortgage solutions. Contact us today!