Stop Renting

This debate has been around for many years, and it will probably be around for many more years to come. Is it better to buy a house or is it better to rent? There are upsides and downsides to both options but for the long term, buying is way out in front as the best option for most. Queensland has a lot more suburbs where it is cheaper to buy than to rent than any other state.

No Deposit/Low Deposit Loans

Many think that they need 20% of the purchase price as a deposit before they can get a loan and whilst this is true if you want to avoid paying mortgage insurance, there are still ways to buy your first home with little or no deposit.

If you are going to go it alone as a single or as a couple then you will need a minimum of 5% of the purchase price as a deposit. The account balances, if you are using more than one saving account, should have been built up, or held steady over the last three months, and the mortgage insurers will want to see this by way of you providing bank statements.

Use your Rent as a Deposit

If you have not been able to save effectively because you are paying rent, you can use this to your advantage. You can use evidence that you have been paying rent through a real estate agent instead of saving as evidence that you have been disciplined with this type of commitment.

You still need to come up with the 5% deposit as far as having the money goes, but it’s not critical that you “saved it all up yourself” in other words you can raise the 5% from any means, i.e., a gift, a tax return, a bonus from work, or the sale of an asset (like a car or bike).

Keep it in the Family

A third option is using family to assist. Consider this scenario, kids want to buy a house, mum and dad want to help, but they say “we don’t have any cash to give you, but we have a house, can’t we use the house” in the past this was a No No, but today many lenders have a policy where they will allow parents or direct family to offer a property that they own as a “co-security” to assist with the purchase for the kids.

Basically the bank will accept equity in the family property by way of a second mortgage, in lieu of a cash deposit.

Next steps

There is a lot of think about that is for sure and it can all seem daunting however we are here to guide you through the process. We love assisting people find their dream home and land. Give us a call today and start the journey towards a place of your own.

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