4 Ways Single Mums Can Buy Their First Home Sooner

First home sooner | Beanstalk Mums

On Tuesday 11 May 2020, Australia’s Housing Minister announced the Single Parent Family Home Guarantee program under a list of federal budget measures aimed at helping single parents in the country. The move has been largely welcomed by Australia’s single-parent population – particularly mums who have long grappled with buying a home as a single parent.

According to estimates, 47 percent of single-parent families currently rent from private landlords. Many feel that the often-neglected group of single mothers is finally getting the help they need to get on the property ladder. While it is a great move from the government, there is more that single mothers can be doing to buy their first home.

Consider Using A Buyer’s Agent For Your Search

Using a buyer’s agent can help you spot cheap properties on the market before they gain a lot of attention. Being ahead of the crowd and getting insider knowledge puts you on the fast track to making the winning offer on a home you can afford. A good and experienced buyer’s agent provides expert insight, saves you time on research potential houses/locations, and can help you with the auction or negotiation process if your price negotiation skills aren’t the best. Based on figures cited by Finders, buyer’s agents typically charge a flat fee, a retainer, and commission the sale. Commission rates can range from 1.5 to 3 percent.

Ask Your Employer For A Raise

Women outnumber men in higher education settings, but are paid significantly less in the workplace. While women are generally more qualified than men, statistics cited by Instant Offices show that women make 27 percent less than men in Australia. For a single mum living on one income and saving up for a house, this discrepancy in wage rates can make a huge difference.

Women are also penalised for motherhood. Past ABS figures showed that women lose 17.2 percent of their lifetime wages when raising children, due to lower wages and inflexibility of working hours. According to the Chief Executive Of DCA, Lisa Annese, each child a woman has lowers her wage-earning ability from 4 percent for the first child to 9 percent for women with two or more children. If you are looking for ways to increase your house savings, one option is to ask your boss for a raise. Asking for a raise as a woman is often unexpected. Research shows that women are 50 percent less confident to do so.

Before heading into the conversion, brush up on your performance at work over your time there. Ensure that you are prepared with instances of good performance and results on the job. You want the employer to focus on what you bring to the company.

Minimise Your Rent While Maximising Your Savings

Another thing a single mother can do to achieve homeownership is minimise their costs where possible. This is markedly tougher on a single income, but is still feasible. The trick is to rent in a lower-cost area while aiming to buy in your dream suburban area. Less desirable areas are cheaper to rent, which means you can put away more money each month. However, ensure the area you choose to rent in is still safe for your children, and accessible for getting to work or school.

Do Your Homework On The Help Available To Single Parent Buyers

Finally, do your research on the financial aid or lending programs out there specifically aimed at single mothers/parents. These can provide a much-needed financial break when you need it – whether it is a break on stamp duties or lower interest rates. They also help you decide on how to your finance your home – whether you choose a conventional or online mortgage entity for your home financing. Digital lenders have faster processing times and fewer fees, but may not subscribe to government home loan assistance programs.

Under the Single Parent Family Home Guarantee, parents with dependent children can purchase a home with a deposit of 2 percent. The program is set to start on July 1, 2021, and currently has 10,000 places. However, a recent statement from the Office of the Housing Minister said there is the possibility of additional places being added if the initial 10,000 places are used in four years.

There is also the First Home Loan Deposit Scheme, which allows first-time homebuyers to purchase or build a home with a 5 percent deposit, instead of 20 percent. The 2020-21 Federal Budget announced an additional 10,000 places for the FHLDS program, and 27 lenders participate in the FHLDS initiative. Check out if your intended lender is one of them when doing your home-buying plan. Also, there is a long list of home loans for single mums in Australia, as well as government-sponsored help like the Family Tax Benefit.

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Owning a home is a dream for many families. Unfortunately, it is a dream that looks a little more unachievable for single mums. Fortunately, thanks to emerging financial programs and the help of a good financial plan, this is no longer the case. Many single mothers have just come a lot closer to their dream of holding the keys to their own home someday soon.

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