“I’m single and ready to mingle get a home loan”
So, you want to get onto the property ladder as a single person? Even if it’s a lot harder, given the one income, it is still achievable if you put together a well thought out plan. Buying a home on your own also remains one of the most satisfying goals you can accomplish during the course of your life.
As specialists in home loans, we’ve consulted the minds of our experienced lenders to share their golden words of wisdom, on what you can do, as a single person, to own your own property sooner and make your dreams a reality.
Manage your budget
If your goal is to be the envy of all your friends and family and own your own property, you’ll need to streamline your expenses and cut your costs – to fast track your savings. This means analysing your statements and being objective with what you can live without. It will also teach you that there are very few things you really need to live your life.
Money talks
Back in the 1980s AC/DC sung that you should “listen to the money talk”, and there is some truth in that. When you’ve saved a sizeable deposit, that will give you more lending power. Check out our savings calculator to help you save for a deposit. Do bear in mind, with stamp duty (if you’re not a first time buyer), legal costs, plus building and pest inspection reports, you’ll need more than just the 5% deposit you might be saving for, once you factor in all these extra fees.
Reset your expectations
If it’s only you, think about the size of property you really need. If it’s also your first property, getting into the market with a one or two bedroom unit will potentially make you more successful when applying. As an added bonus, you can then build up the equity in that property, which you can then use to reinvest into a larger home in the future.
Working 9 to 5
Nothing makes a lender happier than seeing a regular stream of income into your bank account every fortnight or month - depending on when you get paid. Most lenders will want to see employment for at least 3 months, but please bear in mind this is subject to the conditions of that financial institution and may depend on your individual circumstances.
Get a side hustle
To help you achieve your deposit goal quicker, you may want to consider getting a side hustle or second job. This can help supplement your primary income and additionally promotes your stability as a genuine home loan applicant. Contrary to popular belief, having a second job doesn’t mean you will get taxed more either. According to the ATO, you will pay the same amount of tax whether you have one or multiple jobs; it is calculated by the amount you earn.
The bank of Mum and Dad
Canstar has reported that two thirds of parents are either making or planning to make financial and personal sacrifices to help their children or grandchildren buy a home. If you’re in the fortunate position where someone you know is able to use their property as equity to help support you, they could act as a guarantor on your home loan. This also means if you have less than a 20 per cent deposit, lenders mortgage insurance would be waived. Do keep in mind, if you fail to keep up with your home loan repayments, the guarantor would be liable to pay them on your behalf.
Investing for the future
As an alternative option, you might wish to consider purchasing an investment property first up and then use the rental income to cover your loan repayments. If you’re in a position where you can still live at home or with family, this will put you in a strong financial position for the future, when you are ready to move into that house or another one entirely.
Whether you’re a first home owner or someone looking to purchase an investment property, check out our range of home loan options to suit you.
