Being a first home buyer in the real estate market can be scary. The thought of saving up a 20 per cent deposit to go along with a home loan for a property is daunting - not to mention the process of actually venturing into the market to find a home!
Fortunately, there are a number of tools to help you make the most of finance and get into your very first home sooner.
First home saver account
If you're looking for a way to save towards a deposit for your very first home, consider opening up a first home saver account.
This is a nationwide government initiative to help first home buyers get a head
start on saving a deposit.
For the first $6,000 you place into the account each year, the government will make a 17 per cent contribution. This helps to give you motivation to save as much as you can to reach that target each year.
The money you save in your first home saver account can only be used to buy or build your very first home, otherwise it may be added to your super fund. There is also a period of four years (which don't have to be consecutive) until you can access your funds to buy your first home.
By accumulating a bigger deposit through a first home saver account, you can limit the amount you'll need to borrow to secure a property.
First home owners grants
Another great government initiative currently in place is the first home owner grant. This is a nationwide scheme that helps to reduce the purchase price of homes for first time buyers.
The amounts and conditions can vary from state to state, with some areas focusing on new homes only.
There can also be stamp duty discounts available in your state, so it's best to check with your mortgage broker or state revenue office before settling on a purchase.
Fixed interest rates
Interest rates are at an historical low and housing affordability has improved dramatically across many parts of the country.
To take advantage of current economic conditions, you may want to speak to a mortgage broker about securing a low fixed interest rate. This can help you to save money on mortgage repayments in the long run.
Another idea you may want to consider is making extra principal payments to your loan to reduce the amount of interest you pay overall. By paying off your loan principal, you'll save on interest.
