July 30, 2013
Buying your first home may seem like a ginormous task trying to save that all important deposit. But homebuyers, you may be unaware that there are more ways than one to be able to afford that first piece of real estate.
By now you have probably heard about the First home owners grant, which gives eligible first home buyers up to $15,000 for new homes or $5,000 for existing.
Not a first home owner? Then don’t despair as the SA government’s Housing Construction Grant is available to anyone building a new home. For more information or to check your eligibility talk to your local broker or check out the conditions at http://www.revenuesa.sa.gov.au/fhog/
Sharing property ownership between two or more people, such as a friend, family member or de-facto partner, can be a great way of enabling you to get in to the market. This could mean combining savings for a larger deposit, increase borrowing power by combining “incomes” as well as sharing property buying and management costs. Legal guidance should be sought when considering a partnership like this.
Family equity loan
Parents can act as the loan guarantor for a homebuyer, by agreeing to let the homebuyers use the guarantors’ property as security. Having a guarantor will not help to increase your borrowing power but it will help to bridge the deposit and upfront expenses gap and it will likely help you avoid having to pay lenders’ mortgage insurance. Anyone who is considering being a guarantor for a property loan is advised to seek independent legal and financial advice beforehand. Most lenders will insist on this, prior to accepting a guarantee.
Investment property before Home purchase
Some people may have found that dream house but may not be able to yet afford to buy in the area they want to live may consider purchasing an investment property first. A clever investment property purchase and a little patience could see these homebuyers-to-be residing in their desired suburb sooner. Hopefully, after a while, the equity built up in the investment property can be used to purchase a home. It is advised before making any decisions, to speak to your accountant and/or financial planner.
In some circumstances, some lenders will consider using cash gifts towards a deposit, combined with a level of “genuine savings”. These gifts need to be non-refundable and non-returnable and usually require a statutory declaration.
Our local team will help guide you through the process, making buying that property easier. Contact Fi Manley at Mortgage Choice in Noarlunga on 0421 360 205.
Or visit www.mortgagechoice.com.au/steve.pratt for more information. #fionamanley