Work Out Your Budget – Auguste Properties

Work Out Your Budget

All of our homes are built ready to be moved into and conveniently located in areas with proven historical capital growth;
close to schools, shops, freeway entries and the Transperth railway network.

Step 1: Understand your limits

Work It Out

To determine whether or not you are ready to buy or invest, you’ll need to work out your budget. Naturally, many people may find this tedious to hear. But it’s an essential part of buying a house or investment property. You need to understand your limits, or at least get a rough idea before you progress any further.

The most logical place to begin when drawing up a budget is to write down your net monthly income. This is the portion of your pay cheque you’re left with after paying tax and other mandatory deductions, such as student debt and superannuation. If you have a partner, include their income as well.

Next, list your monthly expenses. This includes everything you spend money on. The list should include bills, food, transport, entertainment, debt repayments and regular contributions to savings accounts for things like your next holiday.

Once you’ve listed your expenses, you can subtract the total amount from your income. The number you are left with is roughly what you will be able to afford as a monthly mortgage repayment. This number may change over time. You may get a pay rise or change employment. But for now, the amount you can pay is a good indicator of what you can expect to afford in the future.

As for a deposit, don’t worry just yet if you don’t have enough money set aside. We’ll cover the types of loans you can look at in Apply for Finance, including ways to secure finance. As a first homeowner, you can also look at the relevant State Grant available. There are various incentives put in place by the Government This grant helps to remove the substantial barriers to entry you face as a first home buyer. The State Grant can be used towards your deposit.

The first home buyers grant in Western Australia is $10,000. It is given to you when you buy or build a new home, and live in that home as your primary place of residence.

Investors’ Equity  Approximately one third of housing loans is from investors wishing to buy their first investment property.  The key to finance funding is knowing how much useable Equity you can leverage from your own home for a deposit.  A 20% deposit is required by Financial Institutions to avoid Lenders Mortgage Insurance.

Working out your equity can be estimated by the current value of your home and subtracting the outstanding mortgage.  The difference between these two figures is your equity.  Use the Mortgage Calculator provided or contact Auguste Properties for further assistance to establish if a loan to finance the purchase is possible.