Blog: The Secret to Saving for a Home Loan Deposit!
Are you a budding first home buyer who is pinching their pennies to secure a home? Maybe you’re a married couple looking for property investments to supplement your retirement. Whatever your reason, it’s never easy to save for a home loan deposit. There are no shortcuts to saving but there are a range of great savings secrets to help you secure that home loan. So prepare to work SMARTER, not just harder, to secure that home loan deposit today.
Why Do I Need a Deposit for a Home Loan?
Everyone has that brother-in-law or long-time friend who promises to pay you back but never does. Well the bank doesn’t want to deal with those people and a home loan deposit will show them that you’ve got the resources to enter into this important contact. Lenders can ask for anything from 5% 3%pato 20% of the loan amount for your deposit but the bigger the initial deposit, the smaller your loan is and the less you’ll pay in the long term.
Tips for Savings Success
Research suggests that it takes just over 4 years for the average Australian to save for a 20% deposit. By working smarter and being aware of your financial situation you can save money faster. Here are a few quick tips:
- Create a Budget
Having all the information laid out in front of you will make it easier to stick to a plan. Making a budget and sticking to it will help you to regularly increase your savings amount and get into your first home faster.
- Eliminate Unnecessary Spending
We’re not saying you can’t have a treat every now and then but look for those extra expenses that are regularly holding you back. A classic example is your daily coffee. You could save $3 to $5 a day just by making your own. With budget coffee machines and barista quality coffee pods available, you won’t even need to sacrifice taste.
- Consider Debt Consolidation
Take control of your debts with a debt consolidation loan from a trusted mortgage broker. This is perfect for people who are already struggling to juggle multiple debts.
- Open a High-Interest Savings Account
It just makes sense that if you’ve set a budget and are scrimping on your coffee that you would want to maximise the benefits. A high-interest savings account can make sure you get the most out of your penny pinching.
- Choose the Right Home Loan
While you’re saving for a home loan consider the best option for you. The main types of loans are:
- Variable – This model sees your interest rates go up and down with the official rate, which is set by the Reserve Bank.
- Fixed – Get the security of a fixed rate for the first one to five years of your loan.
- Split – Enjoy the best of both worlds with a loan that is split between a variable and a fixed rate. With the proportion of the split entirely in your hands this option gives you a mix of flexibility and certainty.
- Family Guarantee / Pledge – Designed for first time buyers, this option can get you into the property market faster. Using the equity of a family member’s home to secure your mortgage makes it easier for first homebuyers to enter the property market. Depending on how much your family member can guarantee, you can borrow up to the full purchase price of the home Learn more about getting into your home sooner and maximizing your borrowing amount!
If you want a better deal on your home loan or help securing your funds, a professional mortgage broker can help you. AAA Mortgage Solutions are Adelaide’s expert mortgage team. Secure your home loan and consolidate your debt. Get in touch with the best brokers in Adelaide today on 08 8182 5555.