5 Secrets To Getting Onto The Property Ladder
It might be a competitive real estate market, but that doesn’t mean first-time buyers can’t use their financial savvy and help from external sources to get onto the property ladder.
A few of our useful tips can give you the edge you need to purchase your first home.
1. Take advantage of government concessions
Buyers in Australia can take advantage of several government concessions. The First Home Owners’ Grant provides eligible Queenslanders with up to $20,000 towards buying or building their first new home. There’s also the First Home Super Saver Scheme and the new First Home Loan Deposit Scheme, which begins on 1 January 2020 and will help first-time buyers with a deposit as low as 5%.
2. Make some savings
Are you close to reaching that ideal 20% deposit amount? Could a few minor changes in your lifestyle help you hit that goal sooner? Shop around for a better deal on utilities, service providers, insurance and mobile phones. Cancel subscriptions you don’t use. Make your lunch at home, and keep track of your expenses and budget with an app to see where further savings could be made.
If you’re a couple and have two cars, consider whether you really need both – after all, registration, fuel and wear-and-tear costs can really add up. Would selling one or at least trading it for a cheaper vehicle help boost your savings? Or are there other expensive items you no longer need that could add a few thousand dollars and help get you over the purchasing line?
3. Joint mortgage
Did you know that joint mortgages are on the rise – and not just between couples? With ‘Generation Rent’ looking to get onto the property ladder, friends and family are joining their financial forces to purchase the home of their dreams.
Whether it’s with a sibling or trustworthy friend, you’re effectively doubling your salary power when it comes to your loan application. There are downsides, however, such as only owning a 50% stake in the property, and there are always risks of domestic or financial fallouts. But if you are both on the same page from the start it could be the ideal solution to home ownership.
4. Consider LMI
If saving the full 20% deposit is holding you back there may be a solution. Did you know that you can get a mortgage without the ideal 20% deposit – it’s just you will probably have to pay Lenders Mortgage Insurance, known as LMI.
LMI covers the lender if you’re unable to pay back your home loan. It adds to the overall cost of your home loan, but the payments are typically made monthly and bundled into your mortgage repayments.
5. Borrow from your parents
A recent study on home loan trends showed nearly 40% of respondents from Queensland said they had already purchased a home with financial help from their parents, or expected to get that support when it came time to buy.
If you’ve been saving for a deposit for a number of years but the cost of housing is beyond your means right now, you might consider borrowing from the Bank of Mum and Dad. With a widening gap between wage growth and housing prices, there’s no shame in getting financial support from wherever possible.
If large gifts of money are out of the question, there are other ways family can assist too – like going guarantor or helping with a family guarantee on your home loan application.
Is now the perfect time to buy?
If you’re ready to get onto the property ladder with your first home contact our team today and make your real estate dreams a reality.