Save every week
Before you can even consider entering the property market, you need to have enough money saved for your home loan. While the total savings required depends on the value of the house and the type of loan you’re applying for, ideally you want to save between 20 and 30 per cent. This might seem a little overwhelming at first, but saving 10 per cent of your weekly pay over an extended period of time will go a long way. However tempting it may be, pretend this money doesn’t exist and don’t reach for it unless it’s an emergency—and no, a night out on the town isn’t an emergency.
Stay out of debt
When you’re running low on money, it can be tempting to sign yourself up to a credit card. This is a short-term financial solution that generally will incur a high interest rate, which can compound if not paid off quickly. Outstanding debts can work against your credit rating, which can create more obstacles when applying for a home loan.
Whether it’s saying no to a night out partying with friends or cooking dinner instead of dining out, there’s a number of budget sacrifices you can make on a weekly basis, that can provide positive long-term financial benefits. It could be something as little as choosing no-name brands when you shop or taking your lunch to work instead of purchasing it, every little thing counts.
Pick the right bank
Choosing a bank you can trust matters on a number of levels. Select a bank that can give you a high-interest savings account, so you can reap the rewards of compound interest. Also, you want a bank that can offer you a low fixed-rate home loan, so you’re not spending your hard-earned savings paying off compound interest.