Buying your first home

		Here's a sneak preview of the things we know your mum and dad would tell you, from Fiona Lippey of www.simplesavings.com.au Save, save and save some more! The higher the deposit you put down on your new home, the better. "You'll be in a healthier position to negotiate a lower interest rate and be able to avoid mortgage insurance. For example if you only manage to save $40,000 when buying a $390,000 home your mortgage insurance will cost $5180. If you managed to save $50,000 for the same property your insurance premium would drop to $4284 saving you $896," Fiona says. Bigger isn't necessarily better: In the olden days our parents bought small homes and built on or upgraded as they could afford it. This may mean your first home is not flash or in the suburb you want to live in but you won't be bogged down by masses and masses of debt and will be able to get ahead faster. Location, location, location! Think about being flexible in terms of location. Fiona explains, "You can save yourself as much as $50,000 by choosing a home just 2km further away then the first place you were looking at." Payback ASAP: Stick every single spare cent in the home loan so you can get rid of it ASAP "If you pay off a $340,000 loan in eight years you will have to pay $103,382 in interest. If you pay the same loan off in 30 years you will have to pay $466,127 in interest. You could buy two homes with the interest $362,745 saved in this case (derived using 6.9% interest rate)." Fiona says. Interest repayments are dead money. "It's money you'll never get back, so make sure your interest repayments are as low as possible by repaying every cent as soon as possible. The way to do this is so keep all your expenses low. Your shopping bill, your house bill, your renovation bill - the less you spend on these and the more you put on your home loan, the better off you will be in the long run," Fiona explains. Save again: Every penny counts. Scrimp, save and make the most of what you have got. Don't pay full price for anything. One of the popular mistakes people make is believing everything in a new house has to be new. "If you want to add a personal touch to your new home or make renovations, check out second-hand stores and eBay for hardly-used and new furniture at lower than retail cost. Second hand renovation materials like tiles, paint or kitchen fittings are another great idea," Fiona says. Re-assess your habits. Bad spending habits are the fastest way to go backwards when you would rather go forward. Go to the Simple Savings Wealthy Habits calendar to assess your habits and look for areas you can pinch those extra pennies from. Simple Savings members have already saved themselves $1.6 million this year. To see how they achieved these results go to the Save-O-Meter.


	"We saved all the profits from my eBay business and recently bought a beautiful block of land which my wife and I will build our first home on later this year!" says Sheffield resident Phillip Kemp who sold on eBay and saved an impressive $20,000 in six months, funding the deposit for a one-acre block of land.
	Turning over almost $15,000 per month through eBay sales, Phillip and his wife Danni-Lee are now able to move out of their rental home. "Buying a house is a big decision but we're excited about taking the plunge. We can now plan our new house which we're going to build using our income from eBay too," says Phillip, who runs a full-time eBay business specialising in search engine optimisation. "Like most first home buyers, we wondered how we could afford it, but we had eBay to help us. We were thrilled by the extra money we saved and also cut our costs by using eBay to buy everyday items at cheaper prices. I've saved hundreds on things like computer equipment - it all adds to your savings pool."