Strategies for young home buyers
To help on a young home buyers home ownership journey there are certain strategies they should consider which will help them succeed.
Education, education, education
When it comes to buying residential property, education is the first step. Essential things young property owners need to know:
- How the property market works – what drives prices up and down
- How to budget, save and manage one’s personal finances
- How to successfully apply for a home loan
- How and when to get in the specialists like a valuer, property inspector or pest inspector
- How to successfully bid at auction or negotiate a private treaty sale
- How to deal with all the parties involved in the buying and selling of residential property
- Know your strategy. Are you buying a house looking to renovate and sell, or are you looking for a long term investment
This information can be found in books, magazine articles, online columns and blogs, consumer advice centres, lender and mortgage broker websites, property listing portals and independent property research websites.
A big advantage of a good property education is that you’ll know the questions to ask, and be able to objectively and knowledgeably assess and consider the answer or advice given.
Learn to budget
A universal truth for young first time buyers is that unless they know how to budget, buying a home will be extremely difficult. A budget is more than just a way to monitor spending; it’s a powerful tool for planning, managing and controlling almost every aspect of their personal finances.
In simple terms budgeting helps achieve financial goals (like saving for a deposit or meeting regular monthly mortgage payments) by comparing income with expenditure and determining whether there’s enough cash left over to put towards these goals.
It’s also imperative that you budget at a higher interest rate to what the lenders are currently offering. This will help avoid over extending yourself financially if interest rates do rise.
Save as early as possible
Start saving now. Even if you don’t plan on buying a home in the immediate future, anything you can put into a savings account now will show a potential lender you have the financial integrity to be able to meet a mortgage repayment requirement. Look for a high interest bearing account to ensure you get the most from your money.
Make sacrifices
Be prepared to make sacrifices. Both big & small. Are you buying too many coffees per day? Buying lunch every day? Here is where you can save some money that will help boost that savings account you have just opened.
Only borrow what you can afford
A good mortgage broker will be able to tell you not just how much a bank will lend you, but will be able to help you decide what you can afford. Having a mortgage should not mean you stretch yourself financially.
If you, or someone you know needs advice on getting onto the property ladder, then please call the office on (02) 6260 7880 and speak to one of our brokers today.
