Melton If you are like myself, then right about now you are starting to think about stepping into the property market. It can be very scary, although if a good plan is put into place it can be one of the best financial decisions to make.
Mindset
To start off, you need the right attitude and mind set. You will most definitely not become wealthy straight away and you must understand that. A plan of ten years plus should be put into place and the best way is to keep your plan written down somewhere, like in a notebook or diary. Speak to people who have also been in the same position as you are currently in, what plans did they make? Was it all smooth sailing? What steps did they take? Did they have bad experiences? The more information and knowledge that you have from others will help you when it comes to making your own decisions.
Good Credit
You may think that paying a phone bill a few days late won’t mean a thing but in the long term it definitely will not help you when purchasing your new home. Credit reporting in Australia now keep bills that are late by one week or more on record. Bills are something that you need to keep on top of, not only because you may have a credit history that isn’t the greatest but it is a great way to get practice into meeting deadlines with money for when you have to start paying off your home.
SAVE SAVE SAVE
Get into a strict habit of putting away a certain amount of money per week or month and STICK TO IT. If you put away a small about of $350 per month you would save $10,000 in two years, which could be the start of a nice little deposit for your new home. A strictly set saving structure will also get you into a good habit for when you have to juggle a mortgage.
Speaking to a Broker
Speaking to a mortgage broker is something that is very important when you start to think about buying your first home. A broker will ask you questions on what kind of income you have, what you do for work, if you have any outstanding loans, or if you have a bad credit history. With the information that is provided a broker will be able to determine how much money you are able to loan from the bank for your house, which will basically determine what your budget is when looking for a property.
Accounting
This brings us to our next stage, which is talking to an accountant. If you decide to purchase your first home as an investment, there are certain things which are tax deductable, things like the money you spend on petrol when traveling to visit your investment property is something that you are able to claim. Having a good accountant to advise you on what you can claim back when owning a rental property is a must if your first home is an investment.
A Guarantor
It is quite common for someone purchasing their first home to have a parental guarantor, which means that the first 20% of the loan is held against their assets. After the first 20% of the loan has been paid, the loan will be released solely in your name. This will definitely help with getting your foot in the property market door.
Purchasing a property is probably the biggest financial decision you will make in your life. Get it right and you may be in a good financial position for years to come, get it wrong and you could get yourself into a very sticky situation. Whatever your decision is, buying to live in, buying to invest, make sure you have as much knowledge as you can about the property market and be sure you are making and reaching achievable goals.
Happy House Hunting!
