How to save for a home while still renting

Saving for a deposit for a home is often the main focus for people who are renting, but there are also other things you should keep in mind.

1. Prepare yourself financially – Many people choose to stay at home with their family for longer, helping them save for a decent sized deposit.  Avoid accumulating debt through credit cards and personal loans.  Large credit card debt can be detrimental to your borrowing capacity in the future when applying for a home loan.
2. Research the property market – Look online or visit as many open homes as possible and research how much properties actually sell for.  This will give you a better idea of what type of property your money will actually buy you.  Consider the necessities that you need, as well as the benefits for looking in a particular areas, such as public transport, shopping centres, schools, as well as any perceived negatives.
3. Take a long-term view – If you can’t afford to live in your desired location or suburb straight away, you could consider buying an investment property. In many cases, people who buy an investment property whilst still renting are better off financially in the long term than people who buy a home and pay it off.  But of course, everyone’s situation is different, and you need to consider what’s right for you.
4. Be informed about the process – Make sure you are aware of all of the terms and conditions of applying for a home loan. For example, banks will not lend 100% of a purchase price of a home, so a larger deposit will be required to secure your dream property.  Also be aware of the associated costs which will be payable, like legal fees and stamp duty.  Knowing this upfront and planning for it financially will help alleviate any pain down the track when it comes to signing your first house contract.