Selling a home to first-time buyers is one of the great pleasures of my job as a local real estate agent. But to make the dream of home ownership a reality, it’s important to form a strategy to manage your money in this new chapter of your life.
See a professional financial adviser or consult your mortgage broker before you start your search so you know exactly what your budget is. Here are some additional tips to help you on your way.
- Be disciplined with money – I don’t mean you should save, or resist buying the expensive pair of shoes or trainers that you’ve had your eye on. Rather, be diligent about which types of accounts you use to bank your money. Seek out high-interest bearing accounts. Sometimes these won’t offer instant access to cash, so think carefully about your weekly or monthly budget. Interest rates are low at the moment, but this is a discipline that will serve you across an entire lifetime.
- Use the first homeowner schemes – Every state has grants available at the moment that can offer up to a $10,000 grant if you move into a new property. You can also minimise your stamp duty, although the rules vary in every state.
- Federal help on hand – First-time buyers can use the First Home Super Saver Scheme, which allows you to make additional contributions to your superannuation scheme to save for a deposit. Ask your accountant, lender or mortgage broker for details.
- Use a mortgage broker – When borrowing for a home for the first time, the number and scope of bank loans can be bewildering. Mortgage brokers will make sense of everything for you. They have an array of products from which to choose. They’ll explain each one, guide you on your spending limit and help you make a loan application.
- Pay off your principal – You do this by paying a little extra on your mortgage each month. Even though money is cheap right now, you’ll still take years off your mortgage schedule by zapping the principal. Smaller principals mean you pay less interest. So, this strategy creates a virtuous, continuous circle until the debt is gone.
- Be frugal with furnishings – The cost of furnishing a new home can get out of control. Take a two-pronged approach by selling your existing furniture and upgrading on a strict budget. You’ll always find great deals online and some real treasures on second-hand sites. Furniture can always be upgraded as you go.
- Home improvements – When you buy your first home, there’ll always be a few jobs that you’ll want to do. If you’re not a DIY expert, then focus on hiring quality contractors. Avoid cash-in-hand operators as nothing wastes cash more than shoddy workmanship. There are plenty of opportunities to save money, but not here so get the job done right the first time.