Buying a first home can seem especially challenging when you’re renting but maintaining a steady rental history can help you into a place of your own.
When you’re renting, it can feel as though the odds are stacked against you buying a first home – especially when weekly rents can be around $446 in a capital city apartment or $560 for houses. But it’s not all bad news. Take a look at our 6 steps that can help you into your first home sooner.
1. Make your rental history count as genuine savings
Some lenders may look on the rent you pay as evidence of “genuine savings”. This can make it worth asking your property manager for a rental reference letter. It will show that you are making regular rent payments, which can be a good sign you can handle a home loan. Of course this hinges on staying up to date with your rent – a good incentive not to fall behind!
2. Save the difference between renting versus owning
As a tenant you could be saving on a number of the costs of home ownership such as building insurance, council rates and repairs and maintenance. These savings represent extra cash to build your first home deposit.
Crunch the numbers to work out what you may be paying if you owned your place versus what you’re paying as a tenant, and aim to set aside the difference. It’s not just a great way to build your deposit, it can also demonstrate to lenders that you have planned for, and can manage, the costs of home ownership.
3. Tap into the first home buyer grant
Don’t forget, as a first home buyer you may be eligible for the First Home Owner Grant (FHOG). The FHOG is state-based, and over the last year a number of states have made changes to the Grant. So it’s worth taking a fresh look to see if the FHOG in your state or territory could provide the extra cash needed to buy your first home.
4. Don’t overlook possible stamp duty savings
Stamp duty can be a major upfront expense, but stamp duty savings may be available to first home buyers in your area.
Check out Aussie’s Stamp Duty Calculator to see the stamp duty concessions you may be entitled to. The savings can be in excess of $10,000 in states like, Victoria. That can be a big boost towards saying “bye” to the landlord and “hello” to your first home.
5. Consider a guarantor
Having a home loan guarantor can help you into your first home sooner – and potentially see you save on lenders mortgage insurance.
A guarantor is usually a family member, who uses their own home to provide extra security for your loan. It’s estimated around 5% of all first home buyers get into the market with the help of a guarantor, so it’s definitely something to ask your Aussie Broker about.
6. Speak with an expert
Rather than playing a guessing game about how you might be able to get off the rental treadmill and into your first home, it makes sense to speak with a home loan expert.