Buying your own home might seem out of reach but with some careful planning, getting a deposit together for your first home loan might not be as hard as you think. Which first home loan is best? Here are five useful tips to help you on your way to saving that all-important deposit.
1. Start a savings plan
Make a list of all your essential living expenses and ask yourself, “How much can I afford to save each month from my salary?” Then set up a direct debit for that amount to go into a dedicated savings account every pay day. This way, you will not be tempted to skip or reduce the contributions.
2. Limit excess spending
Think about ways you can cut your everyday costs to contribute even more to your savings for that first home loan. You might need to only make a few small changes, such as limiting nights out at bars and restaurants to once or twice a week, or making your own coffees and lunches instead of buying them.
3. Increase your income
Having a money-earning project on the side of your full-time job can also boost your savings faster. You could sign up to test products at a market research company, start a freelance writing or graphic design business if you’re a creative type, or even sell clothing and goods you don’t use anymore on eBay. 4. Make your money work for you Put your savings in a high interest account to make your deposit accumulate faster. You could also consider using a term deposit, as they often have higher interest rates than regular savings accounts, and restrict access to your money for a set period of time, making it less tempting to pull funds out of your savings.
5. Pay down your credit card
Paying down credit card debts is another key way to minimise your costs and maximise your savings for your first home loan. Not only will you reduce the amount of interest you’re paying, you’ll also improve your credit rating and your chance of getting your home loan application approved.
If you really want to get on the property ladder but are struggling to figure out how, Choice Home Loans can help. As your dedicated financial partner, a Choice Home Loans mortgage broker can help you shop for a first home loan within your budget, and guide you through everything you’ll need to apply. Get closer to securing your first home loan today.
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