5 Tips for Getting into the Property Market

Gino FarinaReal Estate Market

With house prices high, accumulating enough funds for a deposit can at times seem overwhelming. Though broken down into achievable steps, these tips can help you get into the market and achieve your first property purchase.

1. Set a Clear Goal

When setting any goal, it is important to make it achievable. Ensure you start with a realistic budget in mind. If you are not sure how much you can afford, there are many calculators available online, or you can contact a Mortgage Broker to provide you with a more accurate figure. Your mortgage broker will also be able to provide estimated costs for stamp duty, conveyancing and other costs associated with purchasing. If you have less than a 20% deposit, then understanding the potential Mortgage Insurance cost is also important.
With your budget now top of mind, you can start researching the property market to see where you can afford to buy; taking into account the distance to transport and key amenities. Buying a smaller property that is closer to the city, in preference to a larger property where further travel maybe required, is a personal choice, so definitely take the time to weigh up the pros and cons of what you can afford within your budget.

2. Create a Plan to Save

With your financial goal set, now is the time to ensure you create positive savings habits, putting money aside each week. Create a budget, starting with your weekly income, then list your fixed costs and how much you can afford to save. Any left over money can be your spending money.
Opening a high-interest savings account and having your employer transfer directly the amount you committed to saving, is a great example of ensuring you put money away each pay period. It is also a great way to earn good interest on your savings, and takes advantage of the magic of compound interest.

3. Clear all Debts

Any debts that you have, including personal loans, credit cards and store cards, will not only cost you more in interest, but will also reduce your ability to borrow. Developing a plan to clear these debts will increase your borrowing capacity and improve your credit score.
You can check your credit score for free once every 12 months with credit reporting companies, such as Equifax, Dun and Bradstreet and Experian. Once you know your score, speak with your Mortgage Broker about developing a plan to improve your score.

4. What Other Options are Available?

Even though property prices may seem out of reach, there are still many ways that you can break into the property market.
You may be eligible for a first home buyer concession, or you may consider using a guarantor, a family member or close friend, to assist with securing a deposit. Another way you may be able to break into the market is by reinvesting – purchasing a property as an investment, in an affordable location, and then renting where you want to live.

5. Speak with a Professional

With so much to consider, the best place to start might be with a finance professional. They will be able to discuss your property goals with you, and work with you to map out a plan for your future. Also speak with family and friends about their journey, and gain as much insight as you can, so that you can plan your future.
If you need advice, or are not sure where to start, feel free to contact me.