Eventually, I was well into my thirties when I decided that it was a case of now or never. I was worried that if I didn't purchase a house soon, I would be deemed too old to take on a mortgage and pay back the loan during my working life. I also was desperate for a garden and animals of my own, something that was near impossible whilst renting flats and units, but I was always wary of becoming a mortgage slave.
The path to home ownership, for me personally, was a path of sacrifice of almost all of life's pleasures but gardening and having a cat of my own. I could not afford to travel or take a holiday. Dining out was limited and there were always unanticipated expenses to do with the house of one sort or another.
The following strategies are the ones I used to pay off my mortgage within fifteen years of purchasing my home, on a single and very average teacher's income:
- Buy the home you can afford, even if it means compromising the area you purchase in a little
- Save up as big as possible deposit
- Establish a good credit rating and savings record
- Make fortnightly repayments, in order to save interest
- Always pay back more than the minimum required payment, every penny extra helps to reduce how much you eventually pay for your house. If you can't afford to do this, then you probably should not purchase a home in the first place. I always aimed at paying at least $100 more a fortnight than was required by the bank.
- Split your loan, I did one half on variable interest rates, but took out the other portion as a fixed rate loan to hedge my bets against inflation.
- I took in one, sometimes two international homestays to occupy spare rooms and give me some extra income for much needed renovations,
- Establish a mortgage offset account, that serves to reduce interest through savings held within it. This is where I banked money earned through my boarders and saved up for renovations.
- Put earnings from every pay rise staight into the mortgage; you don't miss what you have never had.
- Avoid redrawing from your mortgage in anything but a finacial emergency
- Forget fashion.
- Pray that you will not need any major dental work
- Make sure you have adequate home, contents and health insurance. Especially vital when you are living on a limited income,
- I lived on and left myself about as much of my pay as someone on unemployment benefits lived on, whilst I was paying off my mortgage. This meant budgeting carefully to cover food and utility bills.
- Enjoy motgage statements showing how much you owe is reducing.
- Forget holidays, especially in the early years of your mortgage. Instead stay at home and paint or work on your garden, or simply catch up with friends and family during breaks from work.
- Living as close to your place of employment as possible saves a fortune on petrol and public transport. My home was within a three minute drive, or, because of the hills, a twenty minute walk to my workplace.
- Savings on travel time gave me more time to prepare yummy food at home, as well as grow food in my garden.
- Take advantage of freebies, like cuttings and bulbs from family and friends to establish a garden.
- Do what you can yourself to improve your home. Labour and skilled trades work is expensive, but can be a necessity. Tackle things like painting yourself.
- Put up with shabby furniture, carpets and less than wonderful decor or bathroom fixtures until you can afford to pay for them with cash.
- Never increase your loan to purchase a new car. Keep amd maintain the vehicle you have, or buy a secondhand replacement if it dies.
- If you have a brand spanking new car, sell it and get a cheaper, but reliable one.
- Do without a car altogether, as one of my friends did. Ride a bicycle instead.
- If you have the good fortune to come into extra money, as in gifts, holiday loadings or tax return refunds, put it straight into your mortgage.
Many people will not like my advice, as they "want it all and want it now". Instead be grateful for and make the most of what you have. Do not despair at the thought of renting well into your thirties. Do not expect life with a home of your own and a hefty mortgage to be bliss. Weigh up whether the sacrifices are worth it!
Personally being "owned by the bank" and in debt was not an experience I found easy. At times I hated my house. Prior to my mortgage I led a pretty charmed life, with regular interstate and overseas travel. I collected and enjoyed wines from cellar door sales and was always up to date in my apparel and footwear, although I have rarely bought new furniture, other than white goods.I went to a lot of live theatre and major music concerts. My mortgage lifestyle lacked most of those comforts.
Paying off that first home involved enormous sacrifice on my part. I managed to stretch my single income by taking in boarders, which was not always easy, or convenient. Had I taken more time my lifestyle may have been a bit easier, but the sacrifices I made then and frugal lifestyle I led, set me up to be able to take advantage of the bounty of life by the time I was in my early fifties.
Even finding a liveable house I could afford was a challenge. Housing affordability has always been an issue for single women; it is not a new phenomenon!