Achieving the great Australian dream of owning a property is an exciting yet daunting venture.

Making that dream a reality while renting is possible. It just takes discipline, research and careful planning.

 Here are some essential tips for breaking the rental cycle and beginning your home ownership journey: 

1. Work out your budget

 The first step on your buying journey is determining how much you can afford to repay. Many banks have online home loan calculators that can determine this for you. Or engage the services of a financial specialist such as Our Broker, who can help you work out what you can afford.

 Once you have an idea of what you could repay on a home loan each week or month, this will provide you with a clearer picture of your borrowing budget and the home you could buy.

 Most lenders advise that no more than 30% of your monthly household income should be dedicated to paying your home loan.

2. Rein in your expenses

 As part of your budgeting, create a list of all your incoming and outgoing expenses. This will show you where you can curb your spending and save more money towards a deposit. 

 Those daily takeaway coffees can add up quickly, and so can those Uber Eats deliveries. Work out other ways you can save – is there a cheaper mobile phone plan you can sign up for or find a more affordable rental while you save for your home deposit.

3. Start saving for a deposit

 Saving for a deposit is a significant commitment, but not all banks require a 20% deposit. However, it pays to check this with your broker.

In addition to this, many lenders will let you borrow up to 90%, or even 95% of a property’s value. 

 A ‘loan to value ratio’ (LVR) is the maximum a bank will lend as a percentage of your home’s market value. So, exiting the rental treadmill with a 5% deposit is possible.

4. Get your credit score in check

 A healthy credit score will make you look better to a lender when applying for a home loan. To check your score, visit the Federal Government’s Money Smart website.

5. Create dedicated savings account for your deposit

 Set up a high-interest savings account that is solely for your home deposit. It will help you keep track of your savings. Also, you won’t be easily tempted to use the funds for other purchases. 

If your ready now top buy a first home and need some advice, your local Raine & Horne sales agent is ready to assist.