Many people in Adelaide and Sydney have the aspiring goal to own his/her own house sooner rather than later, however, that dream is becoming harder to achieve as the house prices had sky rocketed in the past three years. In Sydney along, the house prices on average had increased by 52.6% over the past 3 years, with more and more Suburbs becoming the million dollar suburbs.
It is a difficult yet not unachievable dream to achieve, however, we need to understand the 10 steps in which you can turn that big dream into a reality, which is to own the house sooner.
- Believe it
It is a common knowledge, that to achieve any big dream, you need to believe in it yourself, believe in the journey you want to pursue. It sounds simple, but so many people pursue a dream they feel is too big for them or is really just unachievable. Hence the very first step in achieving the dream is to believe in it. There is a famous saying from Napoleon Hill, “What the mind can conceive and believe, the mind can always achieve.”
- Plan and Take Daily Actions
A dream is always a dream until one puts in the hard yakka and the sweat. However, we need to plan it well before we blindly delve into the actions without meaningful direction.
It is beneficial to discuss the issue with an experienced mortgage broker who is also a licensed tax agent, as he/she would be able to sit down with you, and analyze your income position, and estimate what is your maximum loan size, and what would be the maximum loan to valuation ratio, which in another word means, what is the maximum percentage of a property, the bank willing to lend the money to you.
For example, if you plan to buy a $500,000.00 house, the mortgage broker will base on your income of $80,000 and work out that bank A might be able to offer the highest loan size of $475,000 and the highest loan to valuation ratio of 95%. At this moment, it is important to find out whether the credit product at that particular bank is able to capitalize the lender mortgage insurance, as if the bank is unable to capitalize the lender mortgage insurance, then you need to pocket out those amount, meaning you will need more cash to settle the house.
Once we understand how much we can borrow, then we need to work out what are the other costs associated with the settlement, those costs include:
- Stamp duty
- Transfer fee
- Mortgage registration fee
- Conveyance fee
- Pro rata council rate fee, water fee and other government fee
Normally for a $500,000 house, the stamp duty along with other cost would be around $25,000, and if you are able to borrow up to 95% of the property value, then you need around $50,000 to complete the settlement. This figure is a really important starting point. Please click here to access our useful calculators.
- Put a time frame to it
Once you know how much you need to buy that dream house, then the next question would be how soon can you prepare the fund. The question on how soon would normally evolves on how much saving can you make on a regular basis.
You can either answer that question by yourself, or you can engage a professional accountant or a financial planner to guide and monitor you along the way in order to ensure you are on the right track to save the sufficient deposit to buy that house. The process would involve sit down with the consultant on a one to one basis, and for the consultant to understand your current income, expenditure positions, and taxation situation, then the financial planner or the accountant will work out a feasible plan in which he/she can identify areas of cost cutting, and ways in which you can maximize your tax refund. They will also be able to break the action plan into smaller steps, and review along the way to fine tune the process, A smaller step is easier to take than a bigger step, it is critical we achieve smaller steps to aim for the completion of final goal.
- Do a preapproval
It is also important to get a pre-approval from the mortgage broker or bank. A pre-approval is a document from the bank stating that the bank had already examined your income, and is able to pre-approve a loan size subject to few conditions, some of them include the acceptance of the security, the maximum loan to valuation ratio, and whether there is a need to provide updated income evidence at the time when you find the house. A pre-approval will give you that level of assurance and comfort in knowing that you are on the right track to buy that dream house, also it is a strong signal to the real estate agent and the vendor that you had done sufficient home work, and more likely it would easier to settle with someone who has a pre-approval.
- Dream big and be happy
Everything starts with dreaming big! Imagine the most amazing incarnation of your dream and dream that. Make it real by imagining what it would feel like to achieve it. What would your life be like as a result? How would you feel every day?
- Ignore the Naysayers
Whenever you pursue a big dream there will always be naysayers who will tell you it can’t be done. They might be your friends and family, but just because you hold them dear to your heart doesn’t mean they are right. Often when people say something can’t be done it’s only because in their personal experience it hasn’t been possible. Don’t listen to them; you are a unique individual with the drive, motivation and ability to achieve your big dream.
- Adopt an Inevitability Mind-set
An inevitability mind-set is all about knowing that it is just a matter of time before you achieve your big dream. It’s not about if, it’s about when. When you work with an inevitability mind-set, success is imminent and your drive, motivation and work reflects it. The inevitability mind-set is powerful because it has the potential to shift your whole perspective.
- Make Room for Your Big Dream
For your big dream to flourish, you need to make room for it in your life. You need to clear out everything that no longer serves you and make the time and space to work on your big dream. If it means quit a packet of cigarettes or going lesser to restaurant, then do it, and work with the financial planner hence he/she can review you on a monthly basis to ensure you are on the right track.
- Keep the Momentum Going
The most important step to achieving a big dream is keeping the momentum going. Every day that you take action toward achieving your big dream you build your momentum and get one step closer. Once you’ve got momentum on your side you become an unstoppable force and success becomes imminent.
Please feel free to contact us on 0403-418-758 if you have any questions on this article, remember to follow these 9 steps hence you can own the house earlier and happier.