The key to entering the property market is having funds available for a deposit. Like I’ve mentioned in previous posts unless you are going guarantor you’ll need some funds for a deposit.
If you are already a property owner then we can look at an equity release which could give you access to the funds you need for a deposit.
If however your equity release is not sufficient or you are a first home buyers then you will need to save for your deposit.
I suggest to my clients that a good way to get started in the savings is consider how much you are going to borrow and look at what approximate repayments that would be each month. Set up a direct debit and put aside this amount each month. I had some clients today who thought they had $70,000 in savings but they actually had over $90,000! Imagine that an extra $20,000!!
Savings is important as it shows you have propensity to the bank. What does that mean? It means you have the ability to repay the loan over time. If you can show your ability to save over a 6 months period then the bank knows that you have the ability to pay back a loan.
I am strong advocate for having multiple accounts. You can set up different names for you accounts – eg holiday, dream house, children….the list can go on. As long as you are not slammed with account keeping fees you can open as many as you like.
My other big saving tip to is cut of the credit card or reduce the limit. This will also help with your borrowing capacity. Limit online spending and impulse buying. It goes without saying that you really need to consider what are needs versus wants?
If the idea of saving $30,000 is just totally beyond you then break it down. Your first target could be $5,000. Once you reach that goal you’ll feel more confident and realise that saving $30,000 is not an impossible dream. At ZEP Finance we are here to help if you l
Take each day as it comes and stay positive!