Rising interest rates combined with climbing property prices present a daunting prospect for many first time buyers. But backed by a solid plan, a little flexibility and a long-term approach, your home ownership dreams may quickly become a reality.
The trick to beating the affordability trap is to start small and to keep your eye on the final prize. Even a modest property investment can be a stepping stone to bigger and better things through allowing you to get the most out of the equity you build in your property with each and every mortgage repayment.
Equity is simply the difference between a property’s value and what you still owe on your mortgage. Through starting with a more humble first home purchase not only will you build equity more quickly, your initial deposit amount will also be smaller – which means you won’t need to spend as much time or money renting before you make your first purchase!
When deciding on how much you can afford to spend on your first home you will need to take a close look at what you can realistically manage in mortgage repayments. Your budget should be your guide – so set yourself a price limit, arrange a mortgage pre-approval through your broker and start searching for properties that match.
It is important to look for suburbs where values are still growing so you can achieve the maximum return on your investment (i.e. grow your equity). This may mean moving to an area that is not initially ideal; just remember that you’re looking to get your foot in the door and you won’t have to live there forever!
Properties in need of a little TLC or a few minor improvements are also a great way to jump into homeownership without breaking the bank.
Once you have pinpointed the right property, immediately start working at building your equity. A tight control on your household budget and other debt will let you chip away at your repayments. With capital growth as your goal, you may soon be on the move and ready for that next buy.
If interested in learning more about this update please contact me today!
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As Domain Property Advocates continues to grow I will continue to provide superior service to those choosing to use property as their investment. It is an important choice of who to choose as the one responsible to look after your property. You can be sure that Domain Property Advocates will always strive to be the best. |  |
