Be Prepared When Budgeting for a New Home
Thinking of buying a home? There are a number of extra costs you may not have budgeted for. A good budget is an essential component of financial freedom and can be the key to finally realising the purchase of your first home.
Find out what is in a good budget and get assistance with planning your own budget. That way you can be prepared and find the best possible prices. To keep on track with your budgets, try using our online calculator.
1) Set Your Goals
How much can you afford? What should you be aiming for? It’s best to answer these kinds of questions now so you can work them into your budget.
As a general rule your mortgage repayments should not exceed 30 per cent of your gross income, leaving some money on the side to budget for smaller things (refer to point 3). See our borrowing power calculator to help identify how much you can borrow.
Tip: Bear in mind any existing debt will reduce the amount you can borrow on your loan.
2) Do your homework
To get the best possible home loan for your finance needs at the right price, you must do your homework. You can make things easier for yourself and speak to an expert mortgage broker who can help negotiate the right loan for your finance needs.
Tip: Loan Market mortgage brokers have access to a wide panel of over 800 loan products from a panel of 30 secure lenders and banks to help you secure the best home loan product for your finance needs.
3) Budget for the little things
When you make a list there is nothing worse than feeling like you forgotten something, not only is it likely that you really have forgotten something, it negates the use of the checklist because you feel as though you can’t rely on it. Instead take the time to make a detailed checklist for every stage of your first home buying experience so you don’t forget any important steps and you can relax knowing that your process is carefully mapped out.
Tip:Budget in for the small things like removalists and home and contents insurance. Check our list of little things below:
- Stamp duties: state government taxes.
- Lender's Mortgage Insurance(LMI): when borrowing more than 80% of the property value.
- Searches and building inspections: it can save money in the long run.
- Other costs: removalists, cleaners, storage and pest inspections etc.