Alternative ways to get on the property ladder. 

Your dream home… you’ve probably dreamt about it a thousand times. Maybe you can feel the plush leather of the sofa in your open plan lounge room. You can see the auburn light of sunrise slowly filling your loft-style bedroom, chased by the playful sound of waves crumbling along the nearby beach.

Suddenly, a graph of rising house prices barges through the door. It’s followed by a pile of letters asking for HECS payments and a slick-haired expert who declares that your morning coffee is Far Too Expensive.

At Bankwest, we know that the dream of owning a home doesn’t have to feel so distant. So 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.

Buy with friends or family.

Buying a house on your own can mean starting with a really big home loan… but luckily; you don’t have to do it alone. You could actually buy with friends (or family) instead. It’s called a joint loan, and it’s one way a lot of young Aussies are breaking into the property market.

One thing to keep in mind: No one wants to lose a friend over money issues, so make sure you agree up front on what you want out of the property and get a written agreement in place.  

Guarantors.

Unless you win the lottery, saving for a deposit can be the hardest thing about getting into the property game. And for many of us, Mum and Dad just aren’t in a position to be able to help with a deposit.

But there is one other way your parents (or any other immediate family member) can give you a hand – by being your guarantor. With a Family Guarantee the guarantor (e.g. mum or dad) agrees to use the equity in their property as additional security for your home loan. This can be limited to deposit amount, rather than the whole amount borrowed which means you could cut down the deposit saving slog, and get started straight away. Plus, you could also avoid paying Lenders Mortgage Insurance. ? Lenders Mortgage Insurance (LMI) is insurance to protect your lender if you have trouble with your repayments in the future. LMI can be an added expense when you’re buying your home, but you can avoid it if you save more than 20% of the value of your property to pay as a deposit.  Close 

The guarantor agrees to use the equity in their property as additional security for your home loan.

First home owners grant.

The government can’t afford to make a habit of sitting in a lamp and waiting to make your wishes come true – but in the case of your first home they make an exception. The First Home Owners Grant is a one-time only leg up that can really help take the edge off the financial burden. ? These change from state to state, but a government grant is money you could be eligible for to help you with the costs of buying your first home. One common grant is the First Home Owners Grant, often abbreviated to FHOG. If you’re building your home, there may be other building grants you can apply for, so this is worth investigating if you are unsure whether to buy an established home or build your own. Close 
 
It’s also worth checking out a Home Buyers Assistance Account (HBAA, WA only), which can grant you up to $2,000.

Park the dream (for now).

Remember the image of your dream home? Take that picture (without all the scary bits), and park it for a bit. Treat your first home as your first step into the property market.

Instead of just looking at traditional houses, look around at units and apartments, or even house and land packages that are a little further afield. Buying sensible to begin with is a great way to help build the equity (money) you’ll need for your ‘dream home’.

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Things you should know

Family Guarantee is available to owner occupiers only. Immediate family member means a parent, adult child, sibling, grandparent, spouse/defacto spouse or legally appointed guardian of the borrower. The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48123123124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.