Buying your first home is an exciting milestone but it can also feel overwhelming, especially when saving a deposit and navigating all the options available. The good news? There are several pathways that can make home ownership more achievable. Here are some of the key strategies first home buyers should consider.
1. Guarantor Loans
If you don’t quite have the deposit saved, a guarantor loan might be an option. This is where a parent or close relative uses the equity in their property as security for your loan. By doing this, lenders may allow you to borrow up to 100% of the purchase price, potentially avoiding the cost of Lenders Mortgage Insurance (LMI).
It’s important to remember that being a guarantor carries risks – your guarantor is legally responsible if you can’t make repayments – so professional advice and careful planning are essential.
2. Gifting a Deposit
Many first home buyers receive a helping hand from family in the form of a gifted deposit. This can boost your savings and get you into the market sooner. Lenders will typically require a signed letter confirming the funds are a genuine gift and not a loan to be repaid.
If you’re lucky enough to have family support, this can make a big difference when it comes to meeting a lender’s deposit requirements.
3. Government Grants & Schemes
There are a range of government initiatives designed to support first home buyers:
- First Home Owner Grant (FHOG): A one-off payment available when purchasing or building a new home.
- Stamp Duty Concessions: Depending on the state, first home buyers may receive discounts or exemptions.
- First Home Guarantee Scheme: Allows eligible buyers to purchase with as little as 5% deposit without paying LMI.
Eligibility criteria vary, so it’s worth checking the latest requirements in your state.
4. Buying With a Friend or Sibling
Another option is pooling resources with a friend or sibling to purchase property together. By combining deposits and incomes, you may increase your borrowing capacity and enter the market faster.
However, co-ownership requires careful thought. It’s wise to have a formal agreement that outlines responsibilities, what happens if one person wants to sell, and how costs will be shared.
Final Thoughts
Every first home buyer’s journey is different. What works for one person may not suit another – and that’s why it’s so important to explore all your options and seek professional advice.
At Mynt Financial, we specialise in helping first home buyers find the right pathway into the property market. Whether it’s exploring guarantor loans, grants, or alternative ways to structure your purchase, our team is here to guide you every step of the way.
Josh Bartlett
Director Mynt Financial
Director Mynt Financial
If you would love to chat about your home loan options – Reach out for a quick chat today
Disclaimer: The information above is general in nature and does not take into account your personal circumstances. Always seek advice from your broker or financial adviser before making home loan/financial decisions.
