Alternative ways to get on the property ladder

Your dream home. You’ve probably thought about it a thousand times. Open plan lounge room, loft style bedroom, a nearby beach…

Then your day dream gets interrupted by thoughts of HECS-HELP payments, house prices and how your morning coffee is too expensive.

But there could be some ways to help you achieve your dream – and they involve thinking outside of the box. Here, we walk you through them with the help of Unlikely Expert and Adventure Vlogger Jake Rich.

Unlikely Experts: Jake Rich - Alternative ways to get on the property ladder

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) 

Buy with friends or family

Buying a house on your own can mean starting with a really big home loan. 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 to seek legal advice, 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 the 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 costly Lenders Mortgage Insurance (LMI). ? 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 

To find out more about our Family Guarantee option, speak to a Home Finance Manager.

 

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

First home owners grant

This is a one-time only leg up from the government that could really help take the edge off the financial burden when you’re buying your first home. The amount of the grant and associated conditions differ from state to state, so do your research and check out what the government could offer you in your particular state or territory.
 
It’s also worth checking out a Home Buyers Assistance Account (HBAA, WA only), which can grant you up to $2,000.

Reinvent the dream

Take that dream and tweak it a bit. Your first home doesn’t have to be your dream home.... it can be a way to get to your dream home instead. Think of your first home as your first step into the property market.

Instead of just looking at traditional houses, check out units and apartments, or even house and land packages that are a little further afield. There’s also something called ‘rentvesting’ that you might like to consider. It involves buying an investment property in an affordable area while renting a property where you want to live. Either way, buying sensible to begin with is a great way to help build the equity (money) you’ll need for your ‘dream home’ in the future.

Want some motivation to save or budget?

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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 48 123 123 124 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.