How to Save for a Home Loan, According to a Financial Expert

How to Save for a Home Loan, According to a Financial Expert
Image: iStock/alfexe

This article is sponsored by CUA.

The first of our Finance Glow Up seminars in partnership with CUA took place on the 29th of September and was packed full of useful money tips. Hosted by Toni May creative director Laura Byrne with CUA money expert Emmanuel Davatzis, the session covered all things savings, with a focus on putting away money for a home deposit. One lucky attendee also walked away with $500.

If you’re keen on a refresher, these are the five biggest takeaways from the seminar when it comes to saving for a house deposit.

Set up a high-interest savings account

The obvious first step is to set up somewhere worth stashing your cash. Davatzis recommends a high-interest account to give your savings a nice little leg up as they accumulate.

He also recommends reading the terms and conditions of the account carefully before signing on the dotted line, as some will have certain requirements. For example, they might require a hefty deposit each month and if that condition isn’t met, it could mean no interest paid to you for that period of time.

Make the most of free resources

There is a tonne of great resources out there to help you get started and stay on track, so make use of them.

CUA has both a Savings Planner Calculator and a Budget Planner Calculator — two great places to start your savings journey. They can also help you see the bigger picture of your finances when you enter your sources of income, outgoing costs and more. But most importantly, they can help you work out a rough estimate of how much you can borrow before going through the pre-approval process.

Keep an eye on your credit score

It goes without saying, but your credit score plays a huge role in a lender’s decision to grant you a home loan. Keeping your score in good shape should start long before you begin applying for loans.

The most important thing to remember is to pay your bills on time. Even something like a phone bill that’s more than 60 days overdue can show up as default, which doesn’t look great on your record. To help make sure your bills are always paid on time, set up direct debits.

Find the home loan that’s right for you

A mortgage is a massive commitment, so don’t just jump into the first one you see. Really delve into some research and work out which option is truly the best one for you and your circumstances.

Read plenty of guides and don’t be afraid to ask a lot of questions, even if you think they might be silly. Home loans aren’t exactly easy and there is no one-size-fits-all solution. Being in the know in this area can potentially save you thousands of dollars.

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Don’t go overboard

It’s great that you’re ready to dive into the next stage of your adult life, but remember not to overdo it. You still need to make time and spend money on yourself. Owning a home is great, but enjoying life is even better.

Pick a few things you can live without and direct those funds into savings. Byrne, for example, saved $6,000 in a year just by giving up her regular takeaway coffee and croissants. It all adds up.

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