Despite falling property prices, First Home Buyers are finding it exceedingly difficult to come up with the required deposit and other money necessary to make a first property purchase. Most state governments have reduced the available First Home Owner Grants making it more difficult to save the necessary moneys for the big purchase. As always when times are tough, people turn to family to help.
Living at home while saving a deposit
This is a very common strategy for young people even those with children. Moving in with your parents allows you to save on the payment of rental and therefore can speed up the rate of saving a home deposit. Many people find that while living separately and paying rent there is simply not enough money left to put away towards a home deposit.
Offering limited equity guarantee
This is where your parents can offer lets say $50,000 of the equity in their own home as a limited guarantee towards your home deposit. If you need to have $100,000 available you can provide $50,000 from own savings and $50,000 secured by your parents home. Their home only offers a limited guarantee in that it only secures $50,000 rather than your whole mortgage.
Lending some cash
This is an easier option as it does not put anyone’s property at risk. If your family can lend you some cash towards your property purchase this can help out quite significantly. You can then agree the period over which you will be comfortable to pay it back.
If you as the first home buyer either lack the needed deposit or the required income to secure a first home loan you may decide to make the purchase jointly with a family member who is perhaps already a home owner and can go as a guarantor or a joint applicant on your loan.
Make your first purchase an investment
If you are lacking the required income to qualify for the purchase of a home of your choice. How about buying the property initially as an investment? In this way you may choose to live with your parents for a few years and rent the investment property out while you save some money to pay down the mortgage as well as collect rental income.