When you’re self-employed you know only too well, your income can vary each month and that makes saving up for a home pretty tough going.
If you really want to show potential lenders you’re a good candidate for a home loan, having a history of steady, regular savings is a really great place to start.
Here are six ways you can amp up your ability to put that money aside.
1. Doing well? Save more
When things are going well and you’re earning more money, don’t be tempted to splash out and reward yourself – keep your eye on the bigger, more important goal. Stash a good piece of that extra cash. The real reward is the bigger number in your interest earning savings account.
2. Set yourself a target
Work out where you want to live first, then calculate how much you need to save for a deposit in that area – and don’t forget to add on those extra costs like stamp duty and legal fees. You can use our buyer costs calculator to estimate some of these expenses. Remember that, depending on the product you’re applying for, different lenders may charge different fees. It’s technically possible to get a loan with a five per cent deposit, but hitting the 20 per cent target will help you avoid extra fees.
It can also help to understand the extra costs involved when buying a house, as they can significantly impact your savings target.
3. Watch your progress
It’s not just kids that respond to visual reminders – we all do. Make a colourful wall chart of your savings target so it’s always front of mind and you can see it grow when you add each new amount to the top.
4. Be smart with taxes
If you’re self-employed, there are tax deductions for business-related expenses that can really add up to help you save. These might include things like home office expenses. To get good information about what you can claim, check out the ATO website or have a chat with a qualified tax professional or accountant who can help.
5. Always put a little something away
A little goes a long way. When your income is different each month it can be tempting to only put money aside when you get large payments in. Everyone’s situation is unique, but if you save a bit of what you earn every time you get paid, you’re always working towards your home ownership goal and getting there one step at a time.
6. Protect your income
If you can’t work because of injury or illness, income protection insurance can help cover lost income so you don’t use your deposit savings to live on. Our insurance specialists are well equipped to source cover suited to your needs. Call our team on 1300 721 794 or get a quote today.
If you’re self-employed, it may also help to understand your available self-employed home loan options and first home buyer loan options before beginning your property journey.
If you’d like more information on home loans and the type of deposit you’ll require, talk to us today by calling 1300 714 984 or get a quote online.
