The First Home Buyer Report by Helia revealed that although home prices are falling, they do not provide much relief to those who want to purchase their first home.
The report says that 68% of the FHBs in the survey cited affordability as the main obstacle to purchasing a home.
Many FHBs are considering other options to buy a house due to the lack of affordability. Here are a few options that they may choose.
Ways To Buy Your First Home Sooner
1. Government Schemes for First Home Buyers in Australia
Several government schemes can help FHBs with low deposits buy their dream homes without having to pay LMI.
First Home Guarantee, for example, is one of these schemes. The scheme is designed to help Australians with low and medium incomes enter the property market. The government will act as your insurer, so you only need to pay 5% of the value of the property as a deposit.
2. Parental Loan
If you can’t save 20% for a deposit, it is common for FHBs to ask for assistance from their parents. You can ask your parents to help you buy a house by becoming a guarantee or purchasing the home with you.
3. Gifted Deposit from Parents
Asking your parents to give you a deposit is a common way of meeting the requirement for genuine savings required for obtaining a mortgage. Your parents must sign a letter stating that this money is a present and not a loan.
It is possible to rent a home that suits your lifestyle and invest in a house that matches your budget.
5. Rent as a real Savings
If you have a good history of renting, some lenders will accept it as a genuine saving. You will need to provide a minimum of three month’s rental history, a rental ledger, or, if you prefer – a rental letter.
6. Guarantor home loans
A guarantor uses their property as security for your home loan. In most cases, parents become guarantors.
7. Buy An Apartment
A first apartment is cheaper than a house. You can move into a permanent home once you have a better financial situation.