Buying your first home in Frankston represents a significant milestone, but the journey begins long before you start house hunting. Building a solid foundation through strategic saving will position you to access Home Loan options from banks and lenders across Australia when you're ready to make your move.
Understanding Your Financial Starting Point
Before diving into saving strategies, assess your current financial situation thoroughly. This includes:
• Monthly income after tax
• Regular expenses including rent, utilities, and groceries
• Existing debts and credit commitments
• Current savings and assets
Understanding these elements helps determine your borrowing capacity and establishes a realistic timeline for purchasing your first investment property or family home.
Government Support for First Home Buyers
The Australian government offers several first time home buyer programs designed to accelerate your path to homeownership:
First Home Owner Grants (FHOG)
These grants provide direct financial assistance, with amounts varying by state. In Victoria, eligible first-time buyers can access substantial support when purchasing new homes or building.
Home Guarantee Scheme
This program allows eligible buyers to purchase with deposits as low as 5%, avoiding lenders mortgage insurance (LMI) costs that typically apply when your loan to value ratio (LVR) exceeds 80%.
First Time Home Buyer Schemes
Various state-based initiatives offer stamp duty concessions and other benefits to reduce upfront costs.
Calculating Your Target Deposit
While the Home Guarantee Scheme enables purchases with smaller deposits, aiming for a 20% deposit offers several advantages:
• Avoiding LMI costs, which can add thousands to your loan amount
• Access to better interest rate discounts from lenders
• Lower monthly repayments due to reduced borrowing
• Stronger position when applying for a home loan
For a property valued at $600,000 in Frankston, a 20% deposit equals $120,000. However, remember to budget for additional costs including stamp duty, legal fees, building inspections, and moving expenses.
Effective Saving Strategies
Automate Your Savings
Set up automatic transfers to a dedicated savings account immediately after each pay cycle. This ensures consistent progress toward your deposit goal.
Consider High-Interest Savings Options
Research accounts offering competitive interest rates to maximise your deposit growth. Some products specifically cater to first home buyers with bonus interest rates.
Review and Reduce Expenses
Analyse your spending patterns and identify areas for reduction. Small changes in discretionary spending compound significantly over time.
Increase Your Income
Explore opportunities for additional income through:
• Part-time work or freelancing
• Skill development leading to promotions
• Selling unused possessions
Preparing for the Application Process
As your deposit grows, begin preparing documentation required for the home loan application process:
• Recent bank statements (typically three months)
• Payslips and employment verification
• Tax returns and financial statements
• Details of any existing debts or commitments
Having these documents organised streamlines the application process when you're ready to get pre-approved for your first Home Loan.
Understanding Loan Features and Options
When evaluating loan packages, consider features that align with your financial goals:
Interest Rate Types
• Variable interest rates offer flexibility and potential for rate decreases
• Fixed interest rates provide payment certainty for set periods
• Split loans combine both options
Offset Accounts
These accounts can reduce interest charges by offsetting your loan balance with your savings, potentially saving thousands over the loan term.
Access to Multiple Lenders
Working with professionals who have access to banks and lenders nationwide ensures you can compare options and find suitable loan packages for your circumstances.
Property Market Considerations
Frankston's property market offers diverse opportunities for first home buyers, from apartments to family homes. Research local market trends and consider:
• Future development plans affecting property values
• Proximity to transport, schools, and amenities
• Your long-term housing needs
• Potential for capital growth
Saving for your first home requires dedication and strategic planning, but with the right approach and professional guidance, homeownership becomes an achievable goal. The combination of disciplined saving, government support through various first time home buyer programs, and access to competitive loan products creates multiple pathways to success.
Call one of our team or book an appointment at a time that works for you to discuss your savings strategy and explore the home loan options available for your situation.
