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Research shows it takes 6 years of savings just to buy an entry level home in Sydney or Melbourne.
In this video, I’ll show you 4 simple and effective ways to fast-track your savings for that first home deposit.
You’ll see here on the table that if you were to live in Sydney and Melbourne, you’d be looking at around 6 years just to get a foothold on to the market.
SIX years! What’s the point seriously… property values would’ve moved more in 6 years time, and we’ll be forever falling behind.
Now you search online on how to save for a deposit and it’s all about setting goals, making budgets, cutting expenses, paying off high interest credit cards, yada yada.
That’s fine but what if you want something more?
There’s gotta be a quicker way right?
I’ll put it out there that some of you might not agree with these methods – and that’s fine, but it’s what I used to get onto the property ladder quicker.
Number 1 – What is the minimum?
By this I mean what is the minimum required for you to get in.
Many people recommend a 20% deposit, which is fine – but did you know that you can get in with as little as 10%?
You will of course need to take out lenders mortgage insurance – which actually protects the lender (not you) in the case that you default.
LMI is calculated differently across each state but as a rough guide, expect to pay over $10k on a home loan of $500k.
This hurts, but it’s quicker than saving an extra $50k if you want to get in. Also, LMI can be capitalised or added onto the loan you take out.
Number 2 – Sell unwanted items.
If you have unused items lying around at home, you could consider selling them for extra cash.
There’s a whole range of online marketplaces to choose from, such as ebay, gumtree, trading post and amazon Australia. And there is literally no limit on what you can sell.
I’ve sold all sorts of random things like old furniture, MrsFrugalSamurai’s designer items, old fridges and microwaves even retro Gameboy games!
Now if you are really radical, you can think about selling your car, or at least downgrading or just taking public transport.
Not for everyone I know, but selling your car can immediately boost your savings by a few thousand.
Number 3 – Move back home with parents, find a cheaper place to live, move in with flat mates.
Although this option may not appeal to everyone, moving back in to your family home might be a good move in allowing you to save on rent and other expenses.
Otherwise, if that thought is way too depressing, or not a viable option – you could think about moving to a cheaper place to live, or move in with flatmates to split household expenses and utilities.
There are a number of online platforms to help you find flatmates, such as gumtree and flatmates.com.au.
And remember to have an agreement in place so everyone is on the same page.
Number 4 – Shop at cheaper stores.
Hey instead of going to Woolies and Coles, why not head to ALDI or Costco?
Because you don’t have to live off less to be able to save money, you just have to buy more with less.
Buy more with the same amount of money by shopping at discount stores or buy things when they are on special, or you can think about buying in bulk.
The same goes with buying more expensive items such as electricals and whitegoods – you might be able to find cheaper prices by doing your research and asking stores to price-match.
Number 5 – Government assistance.
If you are a first home buyer, there are heaps of schemes and grants for you.
First Home Owner Grant, this is where you receive a subsidy from your state government (up to $20K) in some cases as well as a reduction/waiver on stamp duty.
First Home Super Saver Scheme, this lets FHB save a deposit through their super. You can make up to $15k of voluntary super contributions a year that can be withdrawn to buy your first home up to a maximum total of $30k.
First Home Loan Deposit Scheme, this is an exciting ones as it allows eligible FHB to buy their house with a deposit as low as 5% of the purchase price without LMI fees.
Number 6 – Get a 2nd job or side hustle.
Sorry to say it, but you NEED to work hard to get ahead these days.
And honestly, with the internet, there are so many jobs you could do in your spare time.
Be an uber driver , do online surveys , apply for a woolies stacker , be a dog walker , the world is your oyster here!
There you have it – 4 ways and 2 bonus ways to accelerate that home deposit and get you on the property ladder. Which way do you like, let me know in the comments below and I hope you enjoyed the video!
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