How to buy a house with a one-time income in Australia
Melbourne woman Nicole Haddow is single, but recently made the Australian dream come true by owning a home on her own.
But the 38-year-old admits it was not without “challenges” with a move to the regional Victorian town of Ballarat needed to make it happen.
“I consider it an adventure. I bought a house that needs work, there are holes in the walls and I am lifting tiles and painting, ”she told news.com.au.
“But I’ve met some lovely people, there are great cafes and a great community and I have no doubt this will be a great lifestyle choice over time.”
The editor stepped up the homeownership ladder by first becoming a tenant, when she bought a two-bedroom apartment in Melbourne’s CBD.
She had moved with her parents for 12 months to “save energy” and also used her writing skills on a number of side activities to increase her income.
However, she admits that she had less than 10 percent of the deposit when buying the apartment and that she chose to take out mortgage insurance from the lender.
“I certainly didn’t expect to be alone so when I saved up for my first property. I was 30 and I realized I couldn’t wait for someone to do it with me, so I had to find a way to strengthen my own security, ”she explained.
“Honestly, there are times when it’s difficult and overwhelming, but the same can apply when you’re in a relationship. I am really proud of what I have accomplished and I really love knowing that I have an asset that I have achieved on my own.
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When the pandemic hit, the tenant moved out of the apartment she had owned for over six years and Ms Haddow decided to sell and use the equity to buy a home.
She said singles can still buy on their own, despite soaring real estate prices in Australia.
“I had to move to the Victoria area to buy a detached house, but I feel really lucky to be in this position,” she said.
“There is still generally more affordable housing compared to capital cities and regional cities, but it’s a question of whether you are ready and able to make that lifestyle change. “
Singles on the rise
Despite soaring house prices, individuals still manage to get a foothold on the real estate ladder, with 38% of all loan applications ME Bank receives from singles, new analysis shows .
Even when the pandemic hit, loan applications jumped 3% for singles in 2020.
The average loan amount for single mortgage applications also increased by 1%, reaching $ 405,755.
But the loan amount for single women is much lower than for men, at $ 386,222, compared to $ 424,820 for single men, according to data from the ME.
Australian singles are also struggling to own homeownership at a younger age, the data shows. In 2018, the average age for single first home loan applications for women and men was 35, showing that many Australians are now entering the market earlier.
Still, single men are likely to enter the real estate market ahead of women, buying at an average age of 32 versus 34.
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Ways for Singles to Home Ownership
ME’s head of home loans and personal banking, Claudio Mazzarella, said that despite escalating house prices, the dream of owning a home is still a top priority for many Australians.
“While there can be challenges with solo applications, such as saving for a deposit and being able to borrow, it certainly isn’t impossible,” he said.
“For those who want to step up the ladder, but are unsure of a single mortgage application, one strategy to consider is co-buying – buying a property with a family member or friend. . Co-purchasing allows both parties to save for a deposit in a shorter timeframe and increases your overall borrowing capacity.
He also recommended that you consider a guarantor when someone uses their property as collateral for your loan.
“When you have a guarantor, lenders are more likely to let you borrow more money, so if you default and can’t pay your loan, they can sell that property and yours to recoup their losses,” he said. he declared.
“Alternatively, one can buy as a ‘rentvestor’ – an investor who owns a property but continues to live in a rental property. The combination of rental income and potential tax breaks saves valuable extra money, while also allowing you to maintain your lifestyle by living in an area where you cannot buy.
A study released this week by the Great Southern Bank also found that around a third of the 1,000 Australians surveyed had either bought or are looking to do so.
Respondents in NSW were the most likely to go it alone and at a much higher rate than other states, with Victorians the least likely to buy solo.
Meanwhile, Ms. Haddow recommends working backwards when buying a home, so find out how much you can afford on a mortgage, then figure out the required deposit.
Tips for saving a deposit
1. Record and analyze your spending to determine how much and where you could save
2. Prepare a budget and stick to it
3. Pay off your unpaid debts on credit cards or personal loans
4. Look for savings accounts with high and constant rates.
5. Set up automatic deposits to a savings account
6. Look for ways to increase your income and reduce your expenses, such as living with your family.