First Time Buyer

It has always been a “big step” to buy your first home, and despite ultra-low interest rates the biggest hurdle for first home buyers is still the Deposit. Thankfully there are several pathways to make the move from renting to owning your own home easier

Tip 1: Banks accepting “rental history” as an indicator of “Genuine Savings”. Let’s face it, it is difficult to pay rent as well as save a deposit….so some banks will actually look at your history of renting as an alternative way to show you are a “saver”. Have you always paid rent “on time” and for a reasonable length of time? There are certain conditions, but this one factor makes a big difference to a lot of first home buyer applications;

Tip 2: Using the government $20,000 first home Grant to build a new home or buy a new unit. This varies in each state, but in Queensland from 1 July the Grant increases to $20,000 which is a huge boost to your deposit contribution;

Tip 3: Using the equity in your parents home as a deposit guarantee. This is a common strategy most often used to avoid paying the additional cost of LMI (Lenders Mortgage Insurance). With LMI sometimes being as much as $25,000, this additional cost to a first home buyer can often be avoided by using some of the equity in a parents home or investment property.

Nowadays banks are more flexible (even in their approach to casual and part time employment) but the central theme remains to protect the borrower and ensure they can afford to buy a home. This requires both a job and some savings history/deposit, or one of the alternatives above.

Today there are several alternative options to the basic response of “have you saved a 10% deposit”? A professional broker will guide you through this process, outlining the options available to you, plus give you a clear plan and help to understand how you can move into your first home. The best way to find a good broker is to call or pm, and have an initial 10 minute chat to understand how they can help.

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.