It’s not just millennials that are struggling to buy their first home, with the generation before (Gen-X) having just as much trouble saving up a deposit and securing their future dwellings.
But there is a silver lining; a number of services are designed to help people save for their first home deposit and grants, all making joining the property market easier than most of us think.
Getting your finances in order, and putting in place a savings plan is imperative to saving for your initial home deposit.
How much do I need to save?
Each bank and financial institution has different guidelines for how much is needed according to your savings, financial history and salary. There are many calculators available on various websites that aid you in working out what you need to do to make the first deposit on a new home, but be mindful that you do need to ring a bank or mortgage broker and fill in your details, so that they can give you the confidence you need to sign a contract on a house or bid an upcoming auction.
Do I really need to have 20% deposit to buy my first home?
The answer is yes and no. You can choose to take out Lenders Mortgage Insurance (LMI), with varies in cost depending on your loan amount and the percentage of the property value you borrow.
Having your parents go guarantee
Many millennials choose to use the equity their parents have in their properties, as guarantee that they will repay a loan. While this is popular, it does come with pitfalls. Make sure you go through this thoroughly with a financial planner, mortgage broker or your bank.
Buying your first home can be the most exciting time in your life, but there are many things you need to take in to account. Make sure you are thoroughly prepared for all the extra charges that will come your way.