When the Australian dream seems out of reach
For many individuals who have yet to secure their own home, achieving this milestone may appear daunting. The rapid and constant increase in house prices have particularly excluded numerous first-time home buyers, especially younger individuals, from entering the property market.
If you're grappling with the notion that home ownership might be out of reach, here are some strategies to gain perspective and determine your next steps:
Adopt the mindset of a homeowner
There’s an easy way to understand the financial commitment of owning your own home: pretend you already have one. Utilise a borrowing power calculator to estimate your borrowing capacity. This will reveal your potential monthly repayments. If you are currently renting, your task then becomes saving the difference between these payments and your current rental expenses consistently. This exercise not only mirrors the financial responsibilities of having a mortgage but also facilitates saving for a deposit.
Assess your priorities
Experiencing a sense of FOMO (Fear of Missing Out) due to not owning a home, especially when it seems like everyone around you does, is a common and frustrating feeling. However, after familiarising yourself with the financial commitments of home ownership, you may discover that you're not yet ready. In such cases, the funds you're accumulating could potentially be better invested elsewhere.
Conduct research on the process
If home ownership remains your goal, it's time to delve into some old-fashioned research. Now that you’re armed with knowledge about your borrowing capacity, determine what type of property and location you can afford. Familiarise yourself with the home loan application process and ascertain the amount required for a deposit.
Develop a plan
Now equipped with a realistic understanding of your objectives, devise a plan to achieve them. If you currently lack sufficient funds for a deposit, your savings plan, inspired by living as if you already have a mortgage, will provide insights into the timeframe required to reach your goal. By sticking to the plan and doing your research, you will make sure that when you can buy, you will be ready to make well-informed decisions.
Got home ownership dreams? By setting your goals on our new member dashboard, we can better connect you with tools and products to get you there.