10 June 2016 7 tips to save your first home deposit sooner If you’re a first home buyer, you would know that saving up a deposit can be one of the major hurdles between you and your first home. However, it is possible to clear this hurdle with the right level of planning and commitment. Here are seven practical tips that may help you get into your new home sooner: Understand your household budget Start by working out your household income and regular expenses. If you’re not good with spreadsheets or numbers, there are many free budget apps available online to help with this. Basically you want to know, at a household level, what your income is and how often you have to pay rent, loans, bills, groceries, transport, services, and other expenses. If you extend this out to a full year worth of income and expenses, you will quickly be able to see what your biggest overall costs are. Review your services and subscriptions Are there any services or subscriptions that you’re paying for but no longer need? Or are there better deals available in the market? Your current provider may even match a competitor’s offer if you ask. Some examples may be gym memberships, electricity, gas, subscription TV, phone or internet. Smooth out your big bills Getting a massive quarterly bill can be a shock to your cash flow. To minimise this, you could set up direct debits to pay a portion of the bill each time you get paid so you don’t get left with a large quarterly bill. As an alternative, some providers even offer a bill smoothing service which serves you smaller bills more often. Although this may mean some potential interest earnings are lost, it does remove the temptation of spending that money before the bill is due. Use regular direct debits to save After knowing your household budget, you should have an idea of how much you can realistically save each time you get paid. Setting up an ongoing direct debit to transfer money into a savings account can be a great way of building up your savings. By not seeing the money in the first place you are likely not to miss it. Consider a more affordable property when starting out Have you considered buying a property which is a bit further away from the city but more affordable? Getting onto the property ladder means you can start building up equity and paying off your home instead of renting. Further down the track you can always upgrade to your more preferred location. Consider a loan which requires less than 20% deposit Some lenders offer home loans which do not require the full 20% deposit although this usually means Lender’s Mortgage Insurance (LMI) costs are also payable. With a smaller deposit required, you may be able to get into your home sooner. Seek professional advice and consider whether this is right for you. Talk to an expert It may be worth getting in touch with a home loan expert so you can better understand your goals and what will be required when you’re finally ready to apply for a loan. This way you will know your savings target which may be achievable sooner than you think. Speak to Ken Wilson at RAMS Sydney South East about your home loan needs.