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Have you finally finished your higher education? Do you plan to settle down and make an investment in real estate?
Homes can be a costly affair for those who are already encumbered with student loans. But with careful planning, you can find ways to save for and purchase the home of your dreams.
Six ways to plan for a new home purchase when burdened with a student loan
- Narrow down on what you want in a house
Homes are available both fully-furnished with state-of-the-art fittings and also with bare minimum furnishings. It’s important that you decide what is essential for you and what isn’t.Choose a house that offers simplistic comforts for the moment. They are less expensive to purchase. You can always have it furnished later.
- Consider the rent-earning potential of the neighborhood
At the outset, the property of your choice may be out of your budget. But, if the rent-earning capacity of the home is good, it makes economic sense to invest in it now, given the high ROI potential it offers.
- Don’t rush into the renovations and makeovers
It’s possible that the house you purchase requires repair work or an overhaul of some sort. But instead of inconveniencing yourself with the expenses of a home renovation, choose to delay the property makeover.This can help you save yourself from the challenges of paying-off two large loans.
- Set aside a cash reserve aside for unexpected expenses
Your property may become the unfortunate victim of a thunderstorm. You may need urgent roof repairs. Instead of tapping into the funds you’ve set aside to pay-off your student loans, keep a separate reserve for emergency expenses.If you can, start saving for contingencies a few months before making your home purchase. It’s better if you start saving right when in college.
- Consider freelancing when working full-time
While setting money aside does help, it’s important to add to this reserve constantly. A great way to do this is by taking up more freelance assignments with your full-time job. This will help you make the necessary money to pay up your loans faster.
- Save a portion of your student allowances
All citizens of New Zealand, and residents staying in the country for a consecutive period of 3 years, who fall within the age bracket of 18-65, and are engaged in full-time studying, are eligible to receive student allowances which are weekly payments which help you meet the living expenditure during your studies.If you’ve already planned to purchase a house post-graduation, saving a portion of your student allowance can help you create a fund for your property.At Total Mortgages, we can help you plan your new home purchase. Speak to our professional mortgage brokers for more information.