I’m a financially savvy person. I always have been. As someone who was brought up by a mortgage broker – my dad – I’ve always had a saving mindset, and not a spending mindset.
For anyone looking to buy a home in Sydney, developing financial savvy is top of mind. Whether the market will be slowing down or charging full steam ahead in 2017 isn’t entirely conclusive yet, but we know one thing for sure: there hasn’t been a significant decline in Sydney property prices for quite some time.
The number one question on most people’s minds is: how do I afford a house in Sydney?
Aside from learning how to save, there are a number of other things you should be doing to buy a home in Sydney.
How to cultivate a positive mindset to buy a home in Sydney
Buying a house to live in to watch your family grow is an exciting time, but it can also be completely nerve racking too. Particularly with the Sydney property market, where demand is high and house prices increasingly on the rise. Because of this, a lot of people approach buying a home in Sydney as a frantic race to the finish line, approaching the entire process out of fear. And that’s normal, because buying a home is an emotional decision as much as it is a financial decision.
Struggling to find your forever home, save for a home loan deposit, improve your credit score or even decide on which suburb to live in? There are a few mindset patterns that you could address that could help you in the long run.
Know your numbers
Do you know how much outstanding debt you have? Do you know how long it will take you to pay off your credit card, your personal loan, or your student loan? Start with a plan to knuckle down on your debt, and then think of a budget for buying a home. When you have a budget for buying a home, you’ll then be able to figure out how much you need for your home loan deposit.
Mindset tip: Knowledge is power. Know how much you need, and know how much debt you need to manage.
Know that life is not an excel spreadsheet
A lot of people try to justify the cost of buying a home in a number of ways: the cost of buying in the long run is shorter than renting; renting is dead money; why not pay towards your net worth rather than another’s? These can all be valid arguments, but does buying a home really suit your lifestyle? Can you quantify happiness? Will buying that 2-bedroom home in Mortdale really bring that fairy tale ending? You can’t calculate this outcome easily, and I might be the first to say that buying a home isn’t always a numbers game.
Mindset tip: emotional intelligence is just as important as intellect.
Which leads me to…
Know your lifestyle, not the Jones’s
Moving to a new home, let alone buying a new home, brings a number of lifestyle changes. You might have been renting in inner Sydney for years, and enjoyed the nightlife, the short commute to work, and walking everywhere. You then decide that buying a house in Sydney is top of your bucket list, and you move out of the suburbs to find a home you can afford. Say hello to suburbia, 45-minute commutes to work and long highways. You might be spending more time in transit than you do enjoying your home, but hey, at least you own your home, right?
Sure, owning your own home contributes to your net worth, but what if you’re completely unhappy with your new home owning life? Just because those around you have found a home that suits their needs, doesn’t mean that buying a home in Sydney is right for you just yet. Be realistic with your expectations of what the Sydney property market has to offer you. It’s not everyone’s emerald city.
Mindset tip: know yourself and be realistic with your choices.
Know your finance style: debtor or saver?
Does saving for a home loan deposit bring fear and anxiety to your day? When you pay off your mortgage every single month, will you snarl at your bills and avoid checking your bank balance? Or will you smile and feel grateful for being able to afford to buy a home in Sydney? The way you approach bills, your mortgage and your debt says a lot about whether you have the right mindset to take on the Sydney property market.
Mindset tip: know which side of debt you’re on. Are you a saver? Or a debtor?
Your mind is your most powerful tool in approaching everything that you do, let alone buying a new home. And to be truthful, it’s one of the only things within your control. It’s up to you whether you approach a mortgage as an uphill battle, or as a challenge to be overcome with determination, and of course, the right mindset.
What’s in your way?
I’ll give you a hint: it might be just you.