Owning a house is a great dream. Whether it’s a free-standing home, a townhouse, an apartment, or a unit built by residential property developers, there are options.
Yet some people seem to think that this is a goal that is way out of their reach. There are excuses you’ll hear - can’t afford it, too tough, tricky to get a loan, the list goes on. Yet these are just excuses.
With a bit of hard work and some tips that we’ll detail in this article, buying your first home is achievable! So, if you’re keen to learn a few tricks to bust your way into the property market this year, you’re in the right place.
1. Save, Save, Save
The first thing you need to buy a house is a deposit. A lender isn’t going to loan you any money without one. This demonstrates that you are capable of saving.
The good news is that some lenders will lend you funds on a 5% deposit. On a $400,000 dollar home, that is just $20,000! This might seem like a tremendous amount to save, but there are a few tips we can share to help you get there.
To start with, cut out your non-essential expenses. These might be take-out meals, subscription services, going out to clubs or bars, or other leisure activities. Remember, you can always take up everything again after you have your home, so be ruthless.
A good tip is to look at your bank statement and track all your expenses. Next, figure out what you can live without. This might mean going without some “wants,” but as long as you have your needs, you’ll be fine.
2. Ask for Help
There is no shame in asking for help from your loved ones. You might want to approach your parents, who may be able to offer you an interest-free loan.
Or reach out to a sibling or a close friend. If they’re in a financial position to help you, it is worth asking.
3. Try Different Lenders
You might think your lending choices are limited to the larger banks. You’re wrong. There are several smaller, boutique lending companies out there happy to take your business.
It’s worth investigating a variety of lending options and getting creative.
4. Hire a Mortgage Broker
If you are struggling with the paperwork and logistics of applying for a home loan, you might want to consider a mortgage broker.
Their job is to get you a loan, with a low interest rate and excellent terms. What’s in it for them, you ask? They get a commission on your loan. But don’t fret; this comes from the bank, not from you. Some brokers won’t charge you a cent. They rely solely on the income from the commissions to make a living.
Do your research, ask friends and family, and pick a broker that suits your needs.
5. Consider Partnering Up
If you find yourself priced out of the suburb you want to live in, don’t fret. Did you know you could partner with your family or friends to buy a property?
There are some unique side by side dual occupancy designs that are available in choice suburbs. It just means you need to pool your money and buy a brand-new townhouse or unit off the plan.
Speaking of off the plan…
6. Buy Off the Plan
When you buy a property off the plan, you pay a deposit on a home before it is built. These properties are usually more affordable than existing homes.
This makes them a great option to get into the property market. Once construction commences, you draw down your loan and move in. You get a feel for what the property is like via designs, renders, and sometimes a display home.
There are several advantages to buying off the plan. First, you’re guaranteed a brand-new property. This means none of the expenses incurred when buying an existing home that needs some work done. All fittings, finishes, and appliances are brand new.
This will save you money for the first few years before you need to undertake any maintenance on the property. Also, if you buy off the plan, you’re likely eligible for government grants available to first-home buyers.
There are a few tricks you can utilise to bust your way into the property market in 2020. To start with, you need to save your pennies - like mad.
Next, it is worth asking for help from the family if they can assist with a loan. Try different lenders, don’t just consider the major banks. Consider hiring a mortgage broker too, who will work for you to get you a good loan deal.
You could partner up with someone to bust into a suburb that might otherwise be unaffordable. And finally, an off the plan property might be a cheaper option, that will also save you money on repairs and maintenance.
Author: Peter Kelly
Author bio: To put it mildly, Peter Kelly is enthusiastic about real estate with 10+ year’s experience as a leading residential property developer and townhouse builder in Melbourne, Australia.
When he’s not looking at properties, or visiting potential sites, Peter can be found online searching realestate.com. For him, it’s more than a job – it’s an obsession.