It’s now been 5 months since my partner & I packed our life up into a bunch of boxes and made the big move from Melbourne to Queensland.
I have to say the months leading up to the move, a lot of emotions surfaced and a million questions came to mind. Is this the right move for us? Will we reach our goals? How will I go working from home full time? Will I make new friends? What if this doesn’t go to plan?
My partner (Luke) and myself moved out of home and started renting in Melbourne of 2020. Times were tough. Although we only rented for 3 years, it felt like a lifetime.
As most of you know the rental market is crazy. Amazing for those who own investment properties – not so much for those of us who are the renters. The cost of living in addition to the ongoing rental rises really kicked our butt.
It was safe to say our situation wasn’t working, so we decided to pack up and head on up to sunny Queensland to live with Luke’s mum and stepdad at a much cheaper cost. You may be thinking, is she crazy? Moving in with the in-laws!
A lot of people may see this as a step backwards, but to us this was the exact step we needed to take.
Being outside your comfort zone is when the magic starts to happen.
While living in Melbourne we felt like our dreams of buying our first home were so far from our reach. How were we supposed to pay thousands of dollars in rent, feed ourselves and our dogs, pay our bills, still live our lives and have some fun whilst saving for our dream home?
We often found ourselves comparing our situation to friends and family, who own their own homes, wondering why we were nowhere close to buying our own. Which was not a healthy way to look at things as it added even more pressure to buying a home.
By getting out of the rental and moving interstate we have already managed to start saving more for our home than we were ever capable of doing in Melbourne while also being able to put money away for holidays and still being able to get out on the weekends and do the things we love again like camping, fishing and visiting islands. (By living with Luke’s parents we’ve also scored full time dog sitters, bonus!)
Buying your first home is extremely exciting, it can also be a really intimidating experience in the lead up trying to come up with the funds, finding something you love within your price range and understanding how the process works. Especially when this kind of thing isn’t taught in schools or spoken a lot about in the everyday life.
A lot of the lingo can be confusing!
This is where it is handy to getting a knowledgeable Mortgage Broker in your corner, someone who is there to answer all your questions and has your best interest at heart. (Plus, they handle all the nitty gritty paperwork!). Luckily for us, finding an awesome Mortgage Broker when the time arises is easy. I just so happen to work with him (*cough* Richard Ballard).
5 months in and I can absolutely say, yes this was 100% the right move for us.
We took the leap and have found a new kind of freedom in being able to explore the wonders of Queensland on the weekends while saving for our dream home. The pressures we were putting on ourselves have dropped immensely.
Some things that have helped us save for our home are the following:
– Speaking to a financial adviser and laying out our situation.
– Getting a good understanding of our ingoing and outgoing expenses (is ordering through uber eats rather than driving and picking it up really worth the additional funds?)
– Opening a joint account that allows you to set your goal savings and gives you progress reports on how you’re doing whilst earning decent interest.
– Set and forget. Direct debiting a set amount away weekly/ fortnightly/monthly into our joint account.
– Accepting the fact that it will take time to save the deposit we want.
– In addition to house savings, putting a certain amount away for our hobbies, nights out and the occasional weekend away. This was a personal preference as we found when we gave up these things, we weren’t happy. Balance is absolutely key.
Helpful lingo / products to know before buying a home:
Offset Account
A mortgage offset account is a savings or transaction account that can be linked to your home loan. The balance in this account ‘offsets’ daily against the balance of your home loan before interest is calculated. An offset account can help you cut years off your home loan term and save money on interest. Some lenders even allow multiple offset accounts which can help you save further on home loan.
Scenario: If your mortgage balance was $380,000 but you had $20,000 sitting in your offset account you would only pay interest on the difference, in this case $360,000.
Redraw Facility
A redraw facility is a loan feature that is usually available with variable rate home loans and some fixed rate loans. A redraw facility lets you access any extra repayments you’ve made on your home loan.
Scenario: if your monthly mortgage repayments are $2,100 but instead you pay $2,400 a month that’s an extra $3,600 paid over a years’ time that is available for you to redraw.
Lenders Mortgage Insurance
Lenders Mortgage Insurance is often referred to as LMI. It is insurance that a lender takes out to insure itself against the risk of not recovering the full loan balance if the borrower/s are unable to meet loan repayments. LMI is a one-off fee charged by the Lender to you when you need to borrow more than 80% of the value of the property.
Stamp Duty
This is a state and territory government tax paid for purchase of property. The amount varies depending on the purchase price. Stamp duty can be a significant cost so it’s important to budget for it! There are multiple calculators available online that can tell you the stamp duty value based on your desired purchased price. This is always handy, so you have a rough idea of what you’re looking at and don’t feel blindsided.
If any of the above is still a little confusing or arises any further questions please don’t hesitate to get in contact with us, we would love the opportunity to offer a helping hand.
