Buying your first home has always been hard, especially during periods when prices are rising fast, as they are now.
But while getting on the property ladder can be challenging, there are five things you can do to buy your first home sooner:
- Visit a mortgage broker
- Access government grants
- Consider a family guarantee loan
- Increase your income
- Reduce your spending
1. Visit a mortgage broker
Most first home buyers assume they’ll need a 20% deposit to buy their home. However, depending on your financial situation and the type of property you’re buying, it might be possible to enter the market with a deposit as low as 10% or even 5%. A good mortgage broker will be able to explain your options.
2. Access government grants
Right now, the Victorian and federal governments are providing a range of first home buyer incentives, which is part of the reason why there’s never been a better time to be a first home buyer. For example, Victoria’s First Home Owner Grant provides a $10,000 payment to eligible first home buyers, while the federal First Home Loan Deposit Scheme lets eligible first home buyers purchase a home with a deposit of just 5% without having to pay lender’s mortgage insurance. Again, a broker can help you claim government incentives.
3. Consider a family guarantee loan
If your parents agree to let you take out a family guarantee loan (i.e. a home loan your parents promise to repay if you default), you might be able to borrow 100% or even 105% of the purchase price. How? Well, the reason the lender might not require a deposit is because it would be getting double security – your home and your parents’ home. Family guarantee loans can be complicated and risky, so make sure you speak to a finance professional before going down this path.
4. Increase your income
Earning more money is hard, but not impossible. Options include starting a side hustle, getting a second job, asking for a raise, asking for extra shifts or switching to a higher-paid job.
5. Reduce your spending
Another way to save a deposit faster is to lower your expenses. Options include eating out less, drinking less, buying less ‘stuff’, cutting back on unnecessary subscription services, and shopping around for cheaper phone, internet, electricity and insurance plans.
Want to chat about buying your first home sooner? Property AU can help. Contact us anytime for more information on 1300 771 911.