Finding achievable homes is a gargantuan ordeal for any first home buyers. But saving a deposit for on a house is already an expensive business in itself. It would naturally entail many figures and numbers being thrown around – where do you even start?
However, with a few key strategies, some dedication, and help from key figures, entering the Sunshine Coast real estate market becomes less intimidating. Here are our top tips on how to save for a house deposit – we guarantee they’ll have you unlocking that new front door in no time!
#1 Downsize your lifestyle
Just remember that downsizing your lifestyle can mean different things to different people. It could mean moving to a smaller home, choosing a more affordable neighbourhood, or cutting back on non-essential expenses. It’s also important to make sure that the downsizing you do is something you are comfortable with and that it doesn’t negatively impact your overall well-being or quality of life.
By downsizing, you may be able to cut back on your overall spending on things like clothing, entertainment, shopping, holiday trips, subscriptions, and dining out to name a few things.
#2 Consider a longer-term savings plan
In Australia, considering a longer-term savings plan can help you in saving for a deposit for a house. You can opt to have a Roth IRA account, or you can make voluntary contributions to your superannuation. You can withdraw your Roth IRA funds at any time tax- and penalty-free, while your super funds can be withdrawn to buy a home under the First Home Super Saver scheme.
Long-term savings plans are often managed by professional financial managers who can help grow your savings. They make sure that your money is invested in a diversified and balanced portfolio.
#3 Apply for first home buyer grants
Applying for government grants is a sure fire way of shaving tens of thousands of dollars off your house deposit! Below are some of the grants you can apply for in Queensland.
- First Home Super Saver Scheme (FHSSS): The FHSSS allows eligible individuals to withdraw voluntary contributions they made to their superannuation fund for a deposit on their first home. It allows you to take advantage of the tax benefits of superannuation and use your savings to buy a home.
- First Home Owners Grant (FHOG QLD): The FHOG in QLD is a $15,000 one-off payment paid to a QLD first home buyer upon their purchase of a new property or when they build a new house.
- First Home Guarantee Scheme (FHBG): The First Home Guarantee (FHBG) (previously labeled First Home Loan Deposit scheme) is part of the Home Guarantee Scheme (HGS). Under the FHBG, a first home buyer Queensland can purchase a home with only 5% deposit without paying Lenders Mortgage Insurance.
- Regional First Home Buyer Guarantee (RFHBG): The Regional First Home Buyer Guarantee assists regional customers in buying an owner-occupied home in designated regional areas. The scheme will cover 15% of the required deposit so eligible buyers can pay 5% of the purchase price without needing to pay the Lenders Mortgage Insurance premium.
#4 Avoid high-interest debts
Pay off any high-interest debt, such as credit card debt, as soon as possible to free up more money for savings. Doing so will not only lower the interest cost on these debts, but it can also help improve your credit score, which can be important when it comes to getting approved for a home loan.
We highly recommend this to be a top priority, as it can have a significant impact on your financial situation and ability to save for a house deposit.
#5 Save automatically
One of the best ways to tackle the subject of how to save for a house is to set up automatic home loan savings account. Having a certain amount automatically transferred from your paycheck into an account will save you from worrying about remembering to transfer the money manually each month or getting into the bad habit of impulse spending.
Setting up automatic savings also lets you easily plan your budget around the amount that is being automatically transferred. You will be able to save more quickly and efficiently.
#6 Increase your income
Increasing your income can come in many forms, it can be through a side hustle, a part-time job, a raise, or a promotion. A bigger income usually means you will have more disposable income to save in your first home buyers savings account.
It also means you can increase your borrowing capacity, meaning you may be able to borrow more money for a home loan. You will improve your loan-to-income ratio, which is a measure used by lenders to assess your ability to afford a home loan.
Ready to get the keys of your dream home? Work with trusted home loan brokers at Sunshine Coast Financial Solutions
So there you have it – our top tips on how to save for house deposit. We hope these help you in your speeding up your application for home loans Sunshine Coast!
Remember, the key is to start early and be strategic about where you put your money. And if you ever need help or advice, don’t hesitate to reach out to us! We’ll be more than happy to guide you through the process and help you achieve your dream of homeownership!
