Buying a house on your own can mean you start with a big mortgage. Luckily, you don’t have to do it alone – you could buy with friends (or even family) instead. It’s called a joint loan and it’s one way a lot of young Aussies are breaking into the property market and buying their first home.
No one wants to lose a friend over money issues, so make sure to seek legal advice, work out how much you’re both chipping in and get a written agreement in place.
Saving for a deposit can be the hardest thing about getting into the property game, especially if you’re trying to buy a house on your own.
But there’s a way your parents (or any other immediate family member) could give you a hand – by being your guarantor. With a Family Guarantee, the guarantor uses the equity in their property as additional security for your home loan. If you put this towards your deposit amount, rather than the whole mortgage, you could cut down your saving time.
Plus, you could avoid paying Lenders Mortgage Insurance (LMI) if your deposit is more than 20% of your property value.
Find out more about our Family Guarantee option.
This is a one-time leg up from the government that could help take the pressure off your savings account when buying your first home. The grant amount and small print differ from state to state, so do your research and check out what’s on offer in your area.
It’s also worth checking out a Home Buyers Assistance Account (HBAA, WA only), which can grant you up to $2,000 for loan fees.
Your first doesn’t need to be your ‘dream home’ – if you buy sensibly, it can be a great way to build equity to help you get there in the future. Equity is difference between the value of your property and what you owe on your home loan. If you eventually sell your first home, you can put this equity towards a deposit on a new one.
Instead of just looking at traditional houses, check out units and apartments, or even house and land packages that are a little further afield. You could also think about ‘rentvesting’ which is when you buy an investment property in an affordable area while renting a property where you want to live. Either way, buying sensibly to begin with is a great way to get yourself on the property ladder without living beyond your means.
Unlikely Experts: Jake Rich
We’ve put together a few tips to help make getting into the property market a little less daunting. So here are four ways to make it less dream, more home – with the help of Unlikely Expert and Adventure Vlogger Jake Rich.
Video transcript (PDF, 65KB)