When you’re thinking about getting your First Home, you need to consider two things;
- You have enough income to service your lifestyle, your current debts and the future loan repayments
- You have security for the loan, in addition to the property you’re purchasing – typically this is a cash deposit.
The deposit seems to be one of the hardest hurdles for First Home Buyer’s and usually this is because 20% of the purchase price is a big stretch. Especially if you’re paying rent whilst trying to save.
To get your First Home in some instances you can have as little as 5% deposit. This means you will pay Lenders Mortgage Insurance however, it also means you will be able to get your foot in the property market and start paying off your own loan rather than your land lords.
The best deposit you can aim for is more like 10-20%. Lenders Mortgage Insurance is tiered so the more deposit you can save the less you’re going to be charged.
Another way many of my clients avoid Lenders Mortgage Insurance is to use their parents property as security. This is called Family Support and it uses your parents as Guarantor for the remaining ‘deposit’. Your parents don’t need the cash, in fact, in some cases, they can still have a mortgage on their property.
If you want to know more about Family Guarantee, or other options like Property Share, please feel free to contact me.
If you are wanting to save your deposit, or you’d like to get an idea on how to budget for a new home make sure you check out The First Home Buyer’s Program, it’s an online course which also gives you access to the Facebook community where you can learn everything a First Home Buyer needs to know.
You can also grab a copy of the E Book, Open the door to your First Home, this book is a guide for all First Home Buyer’s from saving for your deposit through to a moving check list.