Keen To Buy a Home, but you have Limited Savings or No Deposit?
With prices moving upward again, the amount of deposit required is also increasing. If you are a first home buyer trying to save this means you are chasing a moving target! Its endless frustration!
I have recently helped a few first home buyers overcome this problem.
Here are a few recent examples.....
(1) Use of Family Equity (BY FAR THE PREFERABLE SOLUTION)
First Home Buyers Ron and Kerrie had no deposit. So they asked Ron's parents to assist with the purchase of their $400000 home. Understandably his Parents did not want to hand them money. But they did allow a loan of $45000 to be put against their family home. His parents quite rightly insisted that the loan be in Ron and Kerrie's name, NOT theirs. Ron and Kerrie agreed to this.
The balance of funds ($355000) were borrowed against the house Ron and Kerrie were buying.
Ron and Kerrie are so happy to have finally escaped paying rent! And they got a really sharp loan product which means their home loan repayments are not much more that what they were paying in rent.
Some big advantages here:
(1) Parents only risk $45000 - not their entire house!
(2) Parents credit rating will be not be affected if Ron and Kerrie cannot make repayments as they are not on any loan agreement.
(3) Ron and Kerrie get to move into their first home AND save lots on Lenders Mortgage insurance.
(4) The Loan against the Parents house will be removed when Ron and Kerrie's home has enough equity to support both loans.
(2) Non genuine savings (OK BUT A BIT MORE EXPENSIVE)
First home buyers Bob and Amanda spotted their dream home and called me. All they had was a small deposit ($20000) which was a gift from a relative. Normally banks would say NO as they had not held the money in their own bank account for 3 months. Because of their excellent rental history this condition was waived and the loan was allowed. They are now happily settled and really happy not to have to shift to yet another renter!
IMPORTANT TO NOTE. In this case the small deposit could have come from almost anywhere. A tax refund, a compensation payout, a personal loan, or perhaps a combination of these.
If you feel the above examples may apply to you – dont wait any longer!. Please call me today on 0418 18 3400.