The prices of homes are declining, but it is providing little relief for those looking to buy their first home, the First Home Buyer Report 2022 by Helia revealed.
Affordability is the biggest obstacle to buying a home, the report states, as 68% of FHBs cited it in this survey.
The lack of affordability has many FHBs considering alternative pathways to buying a home. Here are some of the options they might choose.
Ways To Buy Your First Home Sooner
1. Government Schemes For First Home Buyers Across Australia
Different government schemes are available to help FHBs having low deposits buy their dream home without paying LMI.
First Home Guarantee is one such scheme. It is aimed at helping low- and middle-income Australians step into the property market. You need a 5% deposit of the property value to qualify for the loan without paying any LMI, as the government acts as an insurer.
2. Loan From Parents
When FHBs can’t save a 20% deposit for a home loan, the most common way of entering the property market is by asking for help from the bank of mum and dad. Your parents can help you purchase a home by being a guarantor, buying a home with you or providing you with a loan for a deposit.
3. Gifted Deposit From Parents
One of the common methods of fulfilling the requirement of genuine savings for a home loan is asking your parents to gift you the deposit. You need a gift letter signed by your parents stating that the money is a gift, not a loan.
This is a strategy of renting a property that fits your lifestyle and investing in a property that fits your budget.
Read more: Rentvesting
5. Use Rent As Genuine Savings
Some lenders will accept rent as genuine savings if you show a solid history of rental payments. A minimum of three months of rental history and a rental ledger or rental reference letter are required.
6. Guarantor Home Loans
This is a home loan where a guarantor use will their property to secure your home loan. Parents become guarantors in most cases.
7. Buying An Apartment
Purchasing an apartment as your first home is more affordable than buying a house. Once you are in a better financial position, you can sell the apartment and move into your forever home.
We Can Help!
Saving for a deposit is a big challenge amidst rising interest rates and a higher cost of living. Different government schemes and alternative methods are there to help first home buyers purchase a dream home. But which one will best suit your situation?
Get in touch with our experienced mortgage brokers to find out if you qualify for the available grants or schemes.
Our specialist mortgage brokers will help you to:
- Apply for all the grants you qualify for
- Simplify the entire end-to-end process for you
- Help you get a competitive interest rate on your home loan
- Order a free upfront valuation
- Help you with settlement and beyond
Feel free to call us on 1300 889 743 or fill out our online free assessment form today!