Budgeting for a Property

When buying a new home, one of the most daunting aspects is the cost of everything, another is the fact it is possibly the biggest purchase that you’ve made to date. Because of this, it is important to make good decisions in financing your home – if you don’t plan wisely, the extra expense can have a significant impact on your lifestyle.

Be clear on the kind of property you want and fully consider your financial position. This is because making informed and realistic choices in this situation is key and will help you achieve your goals.

Many people will overlook the idea of having a monthly budget, the most basic of financial strategies. But if you understand how much money is coming in and where you are spending it each week, you are in a much better position to re-evaluate your spending. More importantly, you will be able to understand the borrowing power you really have.

Through understanding your financial situation, you will also be more equipped to make room in your budget for the upfront costs such as the deposit, stamp duty and other cost which may be incurred such as inspections or conveyancing. If you don’t already have the deposit saved, the you will need to build a savings plan into your budget to work towards these costs.

When budgeting, the most important things is to be honest and transparent. Small everyday costs can add up, so include takeaway coffee, eating out and parking costs alongside the larger costs such as rent, bills and car registration. As you compare your income with your spending, decide on how much you want to allocate to buying a new home, then make cuts to spending from there. If every spending detail is listed, you can make better decisions on what to cut down on and what is important to your lifestyle.

If you are purchasing your first property, you may be eligible for the First Home Buyers Grant and Stamp Duty Concession.

Once you’ve determined your financials, you are ready to begin exploring financing options. Begin by asking questions from people you trust, speaking to your bank, a financial advisor or a mortgage broker. These discussions will help you to be informed about the options available to you and prepare you to make the right choice.