Unless you are lucky (?) enough to stay living with the parentals until you buy your first home, you will likely spend a season renting, pre mortgage. Spending hard earned dollars renting can sometimes feel disheartening, but we have a few simple steps to make the most of your time. And your money! Your future self will thank you for it.
1. Get 2020 vision
We couldn’t have a year more perfect to talk about VISION.
The key to your season of renting is all in how you view it. If you focus on the doom and gloom of rising property prices and increasing unaffordability, you will likely convince yourself that home ownership will never happen for you. So the first key is to have a clear vision of what you want.
First and foremost, do you want to own a home? If yes, what is a good first house for you in your situation? What location will you focus on? What are you flexible on and what are your non-negotiables? The clearer you are, the shorter your path will be. Or instead I could say the clearer you are, the more clear the steps to get you there will be.
Speaking of vision, why not make it VISIBLE…? Write up your goals, cut out pictures for the fridge, get the plan on PAPER. However it works for you, get 2020 VISION for your first home dream in 2020.
2. Get professional advice
Once you have the dream, put a framework around it by getting good advice from the people who can help direct your steps. How big your deposit needs to be and how much you can potentially borrow will come down to your unique combination of income, credit rating, debt, assets, budget and job.
An experienced mortgage broker will quickly have an excellent grasp on your position and they’ll know which lender will give you the best options. They will discuss just about anything related to your finances to create a savings plan and eventually secure your home loan.
It’s never too early to talk!
Give me a call anytime on +0508 THE MARSHALL (0508 843 627) for a chat.
3. Create a specific savings account
It may seem too simple but there are so many reasons why this works. Firstly, going back to #1, this is where you see your vision become real. Call your account “NEW HOME” and every time you check your banking you will be reminded what you are working towards. As each dollar gets added and you see your savings grow, it motivates you to keep adding to it.
This account can also help deter you from unnecessary purchases. What you focus on grows. You could even set up automatic payments that you will have when you own a home (i.e. for rates and maintenance) and make those ‘payments’ into your NEW HOME account while you are renting, setting you up for extra savings now and great habits for later.
4. Say goodbye to unnecessary expenses
We don’t want to be the avocados-on-toast police here but this is the time to really look at what you give yourself permission to spend on. And what not to. The word I’m avoiding is…. BUDGET.
Know your numbers, know where your money needs to go, allow for some fun and rewards along the way - just do it in a way that sets you up to win.
5. Explore all your options
This is again where professional help will assist you but make sure you are taking advantage of all that is owed to you. Will your employer match your Kiwisaver contributions (money which you can draw on as a first home deposit)? Are you renting the most cost-effective house or unit so that you can maximise your savings? Can you negotiate your rent or take in a boarder? Can you house-sit instead or move in with friends?
If you're a first-time buyer and you've been making regular KiwiSaver contributions for at least 3 years, you may be able to apply for a First Home Grant (previously KiwiSaver HomeStart Grant) through Kāinga Ora. For more information give me a call or visit here.
Whether you are the ‘typical’ first home buyer and a young professional or young family, or you are in your 50’s or beyond, we love seeing you achieve home ownership and are dedicated to helping make it happen for you.
“It’s never too late to start buying property and the potential rewards are big.”
Caroline James (Real Estate .com.au writer)