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Mortgage featured stories

The Five Step Savings Plan for First Home Buyers

Home Finance, Property, Tips
Share
Getting into the property market and buying your first home can seem like an impossible task to many. Saving the deposit seems like a big ask, then you need to consider Stamp Duty and other purchase costs that just require even more savings! Getting the deposit together takes discipline, but the rewards are great if you can manage your money effectively. So what are the steps a future first home buyers should be doing to achieve their goal?
Step 1 – Establish a Budget It might not be exciting, but the first thing you need to do is set up a Budget! Yes that “B” word, Budget! As we have already said saving a deposit takes discipline, and budgeting gives you a means to track your spending and put your finance priorities in order. A well prepared budget allows you to analyse your spending and assess whether you can cut down some of your discretionary spending to get you towards home ownership faster. ASIC has a great budget planner on their Money Smart website (https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner) Step 2 – Start Saving Once you have worked out what surplus funds you should have from each salary / wage deposit, make sure you set up a separate account, preferably a high interest account, to deposit those funds into each pay day. You need to make sure you don’t touch these funds, no matter what, until you are purchasing a house. The other benefits of having regular savings deposits as part of a budget is that when you are ready to apply for a loan you can demonstrate to the lender your regular savings pattern.  This will be a real positive as part of their loan assessment processes. Step 3 – Understand the local property Market? Now that you have a savings plan established you need to research the property market and understand the cost of housing in the areas you are interested in. Remember, you may have to consider a cheaper suburb for your first home so make sure you are building your knowledge on what your money buys over a number of suburbs. You can do this research by attending open inspections in your preferred areas or even spending an afternoon on the internet researching property sites such as www.realestate.com.au or www.domain.com.au Step 4 – Meet with a local Mortgage Broker? This is the step that for many, where reality begins to step in. Your Mortgage Broker will be able to guide you as to what your borrowing capacity is (i.e. how much a lender is likely to lend you), what other costs are involved (stamp duty etc) and what the repayments are likely to be. From here you will get a much clearer picture about the savings you need to contribute. Make sure you ask your Broker to tell you what the repayments will be should interest rates increase by say 2 – 2.5% p.a., so that you can make sure you understand the financial impact of any potential interest rate increase. Your Mortgage Broker will also be a wealth of knowledge in letting you know any Grants or First Home Buyer benefits you may be eligible for! Or even other options (i.e. Family Guarantees https://brentonparsons.com.au/home-finance/what-is-a-family-guarantee-loan/ ) that may be available to help you get into the market sooner. Step 5 – Review your Budget & Savings! That “B” word again! Now that you have an understanding on what you can afford, the price of property and what savings are required, you need to review your budget. Are your current regular savings adequate? How long will it take you to save the money you need? Can you make lifestyle adjustments to save even more? Do you need to reconsider the price of the property you can afford? As a rule, now you have an idea of your potential loan repayments when you have purchased a house, your minimum regular savings should be:

Minimum Savings = The amount of your forecast loan repayment Plus forecast utility expenses (i.e. water, council rates etc) Less any rent you currently pay.

Preferably your forecast loan repayment should assume a higher interest rate than what is current. If you maintain savings at this level over the longer term, you are proving to a potential lender that you have the ability to service your loan repayments and are a good credit risk. Good Luck and happy saving!

More Stories

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Mortgage featured stories

The Five Step Savings Plan for First Home Buyers

Home Finance, Property, Tips
Share
Getting into the property market and buying your first home can seem like an impossible task to many. Saving the deposit seems like a big ask, then you need to consider Stamp Duty and other purchase costs that just require even more savings! Getting the deposit together takes discipline, but the rewards are great if you can manage your money effectively. So what are the steps a future first home buyers should be doing to achieve their goal? Step 1 – Establish a Budget It might not be exciting, but the first thing you need to do is set up a Budget! Yes that “B” word, Budget! As we have already said saving a deposit takes discipline, and budgeting gives you a means to track your spending and put your finance priorities in order. A well prepared budget allows you to analyse your spending and assess whether you can cut down some of your discretionary spending to get you towards home ownership faster. ASIC has a great budget planner on their Money Smart website (https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner) Step 2 – Start Saving Once you have worked out what surplus funds you should have from each salary / wage deposit, make sure you set up a separate account, preferably a high interest account, to deposit those funds into each pay day. You need to make sure you don’t touch these funds, no matter what, until you are purchasing a house. The other benefits of having regular savings deposits as part of a budget is that when you are ready to apply for a loan you can demonstrate to the lender your regular savings pattern.  This will be a real positive as part of their loan assessment processes. Step 3 – Understand the local property Market? Now that you have a savings plan established you need to research the property market and understand the cost of housing in the areas you are interested in. Remember, you may have to consider a cheaper suburb for your first home so make sure you are building your knowledge on what your money buys over a number of suburbs. You can do this research by attending open inspections in your preferred areas or even spending an afternoon on the internet researching property sites such as www.realestate.com.au or www.domain.com.au Step 4 – Meet with a local Mortgage Broker? This is the step that for many, where reality begins to step in. Your Mortgage Broker will be able to guide you as to what your borrowing capacity is (i.e. how much a lender is likely to lend you), what other costs are involved (stamp duty etc) and what the repayments are likely to be. From here you will get a much clearer picture about the savings you need to contribute. Make sure you ask your Broker to tell you what the repayments will be should interest rates increase by say 2 – 2.5% p.a., so that you can make sure you understand the financial impact of any potential interest rate increase. Your Mortgage Broker will also be a wealth of knowledge in letting you know any Grants or First Home Buyer benefits you may be eligible for! Or even other options (i.e. Family Guarantees https://brentonparsons.com.au/home-finance/what-is-a-family-guarantee-loan/ ) that may be available to help you get into the market sooner. Step 5 – Review your Budget & Savings! That “B” word again! Now that you have an understanding on what you can afford, the price of property and what savings are required, you need to review your budget. Are your current regular savings adequate? How long will it take you to save the money you need? Can you make lifestyle adjustments to save even more? Do you need to reconsider the price of the property you can afford? As a rule, now you have an idea of your potential loan repayments when you have purchased a house, your minimum regular savings should be:

Minimum Savings = The amount of your forecast loan repayment Plus forecast utility expenses (i.e. water, council rates etc) Less any rent you currently pay.

Preferably your forecast loan repayment should assume a higher interest rate than what is current. If you maintain savings at this level over the longer term, you are proving to a potential lender that you have the ability to service your loan repayments and are a good credit risk. Good Luck and happy saving!

More Stories

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Mortgage featured stories

The Five Step Savings Plan for First Home Buyers

Home Finance, Property, Tips
Share
Getting into the property market and buying your first home can seem like an impossible task to many. Saving the deposit seems like a big ask, then you need to consider Stamp Duty and other purchase costs that just require even more savings! Getting the deposit together takes discipline, but the rewards are great if you can manage your money effectively. So what are the steps a future first home buyers should be doing to achieve their goal? Step 1 – Establish a Budget It might not be exciting, but the first thing you need to do is set up a Budget! Yes that “B” word, Budget! As we have already said saving a deposit takes discipline, and budgeting gives you a means to track your spending and put your finance priorities in order. A well prepared budget allows you to analyse your spending and assess whether you can cut down some of your discretionary spending to get you towards home ownership faster. ASIC has a great budget planner on their Money Smart website (https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/budget-planner) Step 2 – Start Saving Once you have worked out what surplus funds you should have from each salary / wage deposit, make sure you set up a separate account, preferably a high interest account, to deposit those funds into each pay day. You need to make sure you don’t touch these funds, no matter what, until you are purchasing a house. The other benefits of having regular savings deposits as part of a budget is that when you are ready to apply for a loan you can demonstrate to the lender your regular savings pattern.  This will be a real positive as part of their loan assessment processes. Step 3 – Understand the local property Market? Now that you have a savings plan established you need to research the property market and understand the cost of housing in the areas you are interested in. Remember, you may have to consider a cheaper suburb for your first home so make sure you are building your knowledge on what your money buys over a number of suburbs. You can do this research by attending open inspections in your preferred areas or even spending an afternoon on the internet researching property sites such as www.realestate.com.au or www.domain.com.au Step 4 – Meet with a local Mortgage Broker? This is the step that for many, where reality begins to step in. Your Mortgage Broker will be able to guide you as to what your borrowing capacity is (i.e. how much a lender is likely to lend you), what other costs are involved (stamp duty etc) and what the repayments are likely to be. From here you will get a much clearer picture about the savings you need to contribute. Make sure you ask your Broker to tell you what the repayments will be should interest rates increase by say 2 – 2.5% p.a., so that you can make sure you understand the financial impact of any potential interest rate increase. Your Mortgage Broker will also be a wealth of knowledge in letting you know any Grants or First Home Buyer benefits you may be eligible for! Or even other options (i.e. Family Guarantees https://brentonparsons.com.au/home-finance/what-is-a-family-guarantee-loan/ ) that may be available to help you get into the market sooner. Step 5 – Review your Budget & Savings! That “B” word again! Now that you have an understanding on what you can afford, the price of property and what savings are required, you need to review your budget. Are your current regular savings adequate? How long will it take you to save the money you need? Can you make lifestyle adjustments to save even more? Do you need to reconsider the price of the property you can afford? As a rule, now you have an idea of your potential loan repayments when you have purchased a house, your minimum regular savings should be:

Minimum Savings = The amount of your forecast loan repayment Plus forecast utility expenses (i.e. water, council rates etc) Less any rent you currently pay.

Preferably your forecast loan repayment should assume a higher interest rate than what is current. If you maintain savings at this level over the longer term, you are proving to a potential lender that you have the ability to service your loan repayments and are a good credit risk. Good Luck and happy saving!

More Stories

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Is a tree or sea change on your horizon?

News
Is a tree or sea change on your horizon? Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Why three-in-four Aussies turn to a broker for home loan help

News
Why three-in-four Aussies turn to a broker for home loan help You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

First home buyers turn to Bank of Nan and Pop

News
First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

First home buyers turn to Bank of Nan and Pop

News
First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

First home buyers turn to Bank of Nan and Pop

News
First home buyers turn to Bank of Nan and Pop Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

What you should know before buying ‘subject to finance’

News
What you should know before buying ‘subject to finance’ Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Not feeling the budget love? 4 ways you could still get ahead

News
Not feeling the budget love? 4 ways you could still get ahead If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Low deposit scheme helps over 150,000 families buy sooner

News
Low deposit scheme helps over 150,000 families buy sooner Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

Here’s why your borrowing power might soon get a lift

News
Here’s why your borrowing power might soon get a lift Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

How to know if you’re paying a fair price

News
How to know if you’re paying a fair price We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

Can you remember your home loan interest rate?

News
Can you remember your home loan interest rate? Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.