Before you work out how much you can afford to repay, you can start to set some home loan goals that will also help you to determine how much to borrow.
Think again about why you are buying. If you are buying a first home, this is generally not your forever home, this is the one to help you get started, to set you up in life.
Take a moment to rethink the locations you are looking to buy in. Which locations would allow you to buy a property with the savings you have? We bought our first property over an hours drive from where we wanted to buy, but we bought there because that’s where we could afford at the time to be able to pay our home loan off in five years. Now it wasn’t all bad, we were closer to family and we were in an area we were reasonably familiar with. It took my husband hours to get to work and back; but we did it anyway.
When we bought, it felt like it would take us forever to move back to our ideal location; in the end it went so fast it was like we never left.
We purchased a property that was within our means to pay off in five years, and that’s what we did.
And that made it all worthwhile.
Sometimes you have to move out of your preferred location to get ahead. That was the best option for us at the time.
Write down areas outside of your ideal location that you would consider buying in. Areas that may be within your price range that you would feel comfortable living in but you may not have considered before. As you write these down, circle the ones you would actually consider buying in.
As you search for properties, start including those areas in your search for properties. If you already have those in your search, see if you can find other areas (like surrounding areas) that you may be willing to consider and then add those to your search too. And then consider what other compromises you are willing to make.