Rent cheap now, so you can save up to buy later

Are you thinking about buying a house but can’t quite figure out how to save enough for it. Our blog article will give you an insight into how to rent cheap now, so you can save up to buy later. Here’s how choosing to rent a cheaper property for a while, will help you buy your own home much faster.

Buying your very first home is a big leap of life. It’s not a thing to be taken lightly, especially during tough financial times. However, you need not starve yourself to be able to save for your first deposit. It’s actually easier than you realise to save for a deposit for your own home, while you rent.

Downscale the dream

Depending on your country, state or municipality there are different transfer fees applicable to different price brackets. Investigate these transfer fees and downscale your dream a little. This means choosing a home with no transfer duty on it, making it easier to buy a home.

Do you need a deposit?

You may not need a deposit for your first home, at all. Some banks are willing to offer 0% deposit home loans, giving first time buyers a 100% home loan.

Having a deposit has got several benefits, this is in spite of the fact that it may not always be necessary. Your bank may review your application in a better light if you’ve been able to set aside some money. Putting down a deposit for your first home pays off later on.A deposit will help you cut back on your monthly home loan repayments.

Rent and save

As you wait to buy your first home, carefully consider your rental options.

Pick your suburb

Compromise and select to rent in a suburb that’s more affordable. This will give you the best opportunity to save.

Downsize while you save

Again it’s all about forgoing certain luxuries. It’s all about the bare necessities and signing a lease that will enable you to put money aside and save.

Set a limit

Most property and financial experts state that you shouldn’t spend more than a third of your annual income on rental housing. While you’re saving for your deposit, aim to spend less than a third of your income, so you can smash that dream home goal.

Doing the numbers

Foregore the temptation of a flashy house and pick the rental property that works for your needs right now. Do the math to see how quickly you’ll be able to afford that deposit you desire. Remember the idea is to rent cheap now, so you can save up to buy later. Instead of renting that luxurious apartment in an upmarket suburb go for a cheaper neighbourhood. The savings you will make on rentals alone will easily enable you to save for your deposit.

Your credit score

The ability to put down a deposit is not the only condition you have to satisfy. You also need to have a good credit rating. Keep it clean by:

  • Making your monthly payments on time, every time.
  • Checking on your credit score, at least once a year.
  • Keeping your credit limits high, but your amounts owing low.

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