Saving for anything is always something you should plan ahead for, especially if you are saving for a home loan deposit. It may seem like a gargantuan task but there are ways for you to make this easy. There are grants and services that are made specifically for the purpose of making savings and entering into the property market easier for you. Aside from finding out the services that you can use to make the house of your dreams a reality, it is also important that you assess your financial capacity and of course start saving for a home loan deposit.
How much can you borrow?
The amount you can borrow greatly depends on how much you can afford to pay over the length of your payment period. There are a lot of finance calculators that you can use online to help you understand how much you can safely manage at a given period of time. These calculators requires to you honestly provide your income, household expenses, credit card limits and other expenses that you may have including dependents and previous debts.
Tips on how to save for a home loan
- Set a budget and stick to it at all costs. Prepare to save, skip non-essentials, steel yourself against buying what you don’t need. Stick to your budget and in no time you will be well on your way to owning your dream home.
- Open a separate account for your home loan deposit. This way you don’t always see your balance when you are checking your everyday bank account. Ideally this will be a high earning savings bank account. Set up your bank accounts so a specified amount gets automatically transferred every pay day. Deposit more when you have extra.
- Keep a record of your expenses on a monthly basis, this will show you where you can save more. Take notes, keep receipts and don’t skip anything. Even the smallest expenses should be noted, small things like ice cream, soda, coffee, taxi and fast food. You won’t believe how much you spend on fast food. If you skip on soda for a month that can lead to savings of $100, this can be a big help to your saving up for your home loan deposit.
Be ready for the extra expenses
When you are saving for a home loan deposit you should not just aim for the 20% of your home cost. You should also save up for the extras like inspection fees, loan application fees and a few other fees that are standard when you are getting a loan. Of course don’t forget that you need to hire haulers when you move into your dream home.