First Home Buyers – Saving for a Deposit

Saving for a deposit can seem like a daunting task, but there are some tried and tested ways to realise the ‘Great Australian Dream’ sooner.

The days of 100 and 110 per cent home loans are a thing of the past.

As a rule of thumb you will need at least a five per cent deposit towards your first home.

What may be more important than the amount of savings, is showing lenders evidence of a good financial history, with ‘genuine savings’ often a critical part of the lending criteria.

In addition to complying with lenders’ policies, having a good deposit will also save you money in the long run as you’ll be borrowing less and  saving on interest as a result.

But exactly how can you speed up your first home deposit?

Here are some tips to help you get your first home savings on track.

Have an end goal –

• Without a savings goal your savings plan is bound be forgotten, or alternatively, you’ll simply give up. Sit down and determine exactly what size deposit you need to save. The best way to do this is after you’ve assessed your borrowing capacity with your Zobel Broker.

Follow your money –

• Understanding exactly where your money goes is the only way to know where and how you can save more. Once you can see where your money is going you’ll be able to make the most effective cut backs.

Set a budget –

• Create a budget that factors in all financial commitments, and then stick to it. Remember to keep a little play money aside for yourself; if your budget is too tight you’ll never stick to it. Keep it realistic and achievable.

Automate –

• The most effective way to stick to a savings plan is to set up an automatic savings account. And do your best to never withdraw any of your cash back out!

Assess –

• Don’t set up a savings plan only to never actually check how you’re tracking. Make sure you check your savings account at least once a month. This will not only allow you to make adjustments as needed but watching you balance going up will keep you motivated and focused.

For more information about saving for your First Home Deposit or if you would like a no obligation assessment of your borrowing capacity click here to contact your nearest Zobel office.