How Do You Figure Out Your Budget to Buy A House?

Your savings are growing and you want to take the leap into property, but how do you figure out your budget to buy a house?

While it can be a different scenario for everyone, many general ideas and rules apply when it comes to saving and budgeting.

In this latest blog from Northside Realty, we talk about the questions to ask your mortgage broker, the costs you face when buying and some tips on ways to save money.

How Do You Know If You Can Afford A House?

If you aren’t sure about whether you can actually afford to purchase a house, the best place to start is by engaging a finance broker.

Everyone’s financial situation is vastly different, but in order to work out your situation, you will need to figure out your income versus expenses and how much are you able to save each month.

Questions to Ask Your Mortgage Broker Australia

Before you go searching and find your dream home, book an appointment with a mortgage broker and consider asking the following:

  • Have I got enough savings for a house deposit?
  • Do I need mortgage insurance?
  • What is the difference between variable and a fixed loan? Which one is right for me?
  • What is my credit score and do I need a credit report?
  • What are some of the other costs involved in buying a house?
  • Should I get a pre-approval from a lender? What does it involve?

TIP: Be realistic with how much you can afford in repayments. Depending on your loan set up, your repayment amount could change in the future. Give yourself space and allow for any unforeseeable changes.

Costs of Buying A House

While you may be thinking about the purchase price of the house as the big number, there are also other costs to take into consideration including:

  • House Deposit – how big does your deposit need to be?
  • Mortgage – what are your repayments going to be?
  • Mortgage Insurance – if you don’t have large enough deposit.
  • Stamp Duty.
  • First Homeowner – you may be exempt from stamp duty or qualify for the first home owner grant.
  • Registration of property title to the Land Titles Office (may vary by state).
  • Home Insurance – recommended to be put in place as soon as you sign your contract.
  • Moving costs – removalists, storage etc.
  • Your finance broker should be able to answer all of the above for you!

Tips to Save Money to Buy A House

The biggest hurdle when it comes to buying a house is saving money, so what are the best ways to do it?

  • Understand your spending habits – gain more of an understanding about your expenses by tracking them in detail for one month and see what can be improved.
  • Make some changes – change a few policies and providers to help lower your costs and potentially maximise your savings!
  • Consolidate any existing debts and look for ways to pay debts off quickly.
  • Set yourself a saving goal and stick to it! 

Here are a few ideas you could try to expand your savings:

  • Limit buying takeaway foods and cook more homemade meals.
  • Plan your weekly grocery shopping with a list and meal plan in mind (avoid impulse buying where possible).
  • If you like going out consider swapping something like clubbing for drinks with friends at home instead.
  • Check your current subscriptions (magazines, clubs, etc) and cancel what you’re not using.
  • Review your existing service providers and see if you can switch to a cheaper one (car insurance, health insurance, mobile phone providers, internet providers).
  • No more takeaway coffee – make your own at work.

Lastly, if you are a first home buyer, are you eligible for a First Homeowner grant? If you are, you could buy your first home needing as little as 5% deposit!

How Do You Figure Out Your Budget to Buy A House?

The best place to start with budgeting to buy a house is to engage the right mortgage broker, they can help answer all your questions.

If you need any further advice, please contact Northside Realty by calling us on (07) 3264 4033 or send an online message here.

Looking to buy, sell or rent property? With a professionally driven team and proven track record, Northside Realty are determined to get you the highest price. Contact Northside Realty today.

Northside Realty cover Albany Creek, Bunya, Bridgeman Downs, McDowall, Cashmere, Eatons Hill, Warner and surrounding suburbs.

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