f you’ve been told you’re not ready to buy a home yet, it might be worth getting a second opinion.
You may have been told you need to save a bigger deposit, increase your borrowing capacity or come back in another 6 or 12 months.
And that advice may be completely correct.
But there’s another question worth asking:
Have all the home buying options available to you actually been considered?
Australia’s Help to Buy Scheme provides another potential pathway into home ownership for eligible buyers. However, not every lender participates in Help to Buy, and not every mortgage broker will necessarily have access to the participating lenders.
That means who you speak to about your home loan could make a difference to the options you are presented with.
What Is the Help to Buy Scheme?
Help to Buy is an Australian Government shared equity home ownership scheme.
Rather than funding the entire purchase through your deposit and home loan, eligible buyers can receive a government equity contribution towards the purchase of their home.
In return, the government holds an equity share in the property.
The aim is to make purchasing a home more achievable for eligible Australians who may otherwise struggle with the deposit or borrowing capacity required to purchase.
As with any government home buying scheme, there are eligibility requirements, property price limits and other conditions that need to be considered.
It’s also important to remember that Help to Buy isn’t automatically the best option just because you’re eligible.
Your overall financial situation and alternative home loan options should be considered before deciding whether a shared equity arrangement is appropriate for you.
Why Your Mortgage Broker Matters With Help to Buy
One thing first home buyers may not realise is that mortgage brokers don’t necessarily all have access to exactly the same lenders and home loan options.
Brokers can have different lender panels and accreditations.
Help to Buy is only available through participating lenders.
This creates an important consideration if you’re exploring your borrowing options.
Imagine you’ve saved a deposit and you’re ready to start looking at buying your first home.
You speak with someone who assesses your situation and tells you:
- You don’t have a big enough deposit
- Your borrowing capacity isn’t high enough
- You need to keep saving
- You should come back in another 6 or 12 months
That advice could be completely reasonable based on the options they have considered.
But if Help to Buy wasn’t one of those options, you could be making a decision without knowing the full picture.
Been Told You Can’t Buy Yet? Ask These Questions
Being told you’re not ready to buy doesn’t necessarily mean the conversation should end there.
Instead, ask why.
Some useful questions include:
- Have we considered the government home buyer schemes I may qualify for?
- Could I potentially qualify for Help to Buy?
- What other low deposit home loan options have we considered?
- Is my deposit the main thing preventing me from buying?
- Is borrowing capacity the problem?
- What specifically would need to change for me to become eligible?
- If I can’t buy today, what should I work on over the next 3, 6 or 12 months?
The goal should be to understand your position rather than simply walking away with a “no”.
You Don’t Necessarily Need a 20% Deposit
Another misconception we regularly hear from first home buyers is:
“I need a 20% deposit before I can buy.”
While having a larger deposit can provide benefits, a 20% deposit isn’t necessarily required in every situation.
Depending on your circumstances, there may be different pathways available, including government schemes and certain lower deposit lending options.
This is why getting your individual circumstances assessed can be so valuable.
Your income, deposit, existing debts, expenses, employment, property price and eligibility for government assistance can all affect what is possible.
Help to Buy Won’t Be Right for Everyone
Help to Buy isn’t a shortcut around normal lending requirements, and it won’t be suitable for every buyer.
You still need to meet the relevant eligibility requirements and the participating lender’s lending criteria.
There are also important implications to consider when the government holds an equity interest in your property.
For some buyers, another home loan or government assistance option may be more appropriate.
The important part is understanding the different pathways available to you and comparing them properly.
What If You’re Genuinely Not Ready to Buy?
Sometimes the answer really will be, “Not yet.”
And that’s okay.
But instead of simply being told to come back next year, we believe you should understand what needs to happen between now and then.
For example, you might need to:
- Build another $5,000 or $10,000 in savings
- Reduce a credit card or personal loan
- Establish additional employment history
- Review your spending and expenses
- Improve your borrowing capacity
- Wait until you meet the eligibility requirements for a particular option
Once you understand the gap, you can create a plan to close it.
That’s very different from simply walking away thinking home ownership is out of reach.
Could Help to Buy Help You Purchase Sooner?
If you’ve been researching the Help to Buy Scheme in Australia, or you’ve previously been told you don’t have enough deposit or borrowing capacity to purchase a home, it may be worth having your situation reviewed.
You may still need more time.
But there could also be options you haven’t considered yet.
At 360 Mortgage Solutions, we work with first home buyers to help them understand their borrowing capacity, deposit requirements, available government schemes and potential home loan options.
Our goal isn’t simply to tell you whether you can buy today.
It’s to help you understand where you are now, what options are available and what you need to do next.
Because before you spend another year saving, it’s worth making sure you’ve considered the options available to you.
Ready to find out where you stand?
Book a quick chat with the team at 360 Mortgage Solutions and let’s look at your options.
Important: Eligibility criteria, lending criteria, property limits and other conditions apply to Help to Buy and other government home buyer schemes. Information is general in nature and does not take into account your individual objectives, financial situation or needs.