First- home buy­ers seek help

The push to buy a first home means savers are get­ting cre­ative, writes

Townsville Bulletin - - NEWS -

So­phie Elsworth

their own home. Lender State Cus­to­di­ans’ gen­eral man­ager Joanna Pretty said buy­ers are look­ing at a range of ways to get their de­posit to­gether in a shorter time pe­riod.

“We are notic­ing in­creas­ingly peo­ple are look­ing to pool re­sources or lever­age re­sources from fam­ily, so par­ents who have done well in the real es­tate mar­ket and have eq­uity in their house – first home buy­ers are look­ing to lever­age from that,’’ she said.

“They are also hav­ing to look at other op­tions such as buy­ing prop­erty with friends and the old adage of ‘ don’t mix friend­ship and money’ has gone out the win­dow.”

New fig­ures from lender ME also found strate­gies in­clud­ing pur­chas­ing a smaller than pre­ferred prop­erty are pop­u­lar ( 23 per cent), fol­lowed by pur­chas­ing in a less de­sired sub­urb ( 19 per cent) just to get a foot on the lad­der.

Ms Pretty sug­gests savers start small and put away lit­tle chunks of cash be­fore set­ting more re­al­is­tic goals along the way of to­tal amounts they aim to have saved. Of­ten a 20 per cent de­posit is the goal of en­try- level buy­ers, oth­er­wise they will be hit with hefty lenders’ mort­gage insurance ( LMI), which pro­tects the lender, not the bor­rower, in case of de­fault.

Loan Dol­phin chief ex­ec­u­tive of­fi­cer Ranin Mendis, who runs the mort­gage bid­ding mar­ket­place, said set­ting up a good, strict bud­get and stick­ing to it is the key to suc­cess.

“It’s all about plan­ning but most im­por­tantly ex­e­cu­tion – set­ting re­al­is­tic bud­gets and sav­ing plans and achiev­ing these,’’ he said.

“It’s al­ways great to have the bank of mum and dad to help with de­posits but get­ting a mort­gage is just the start– bor­row­ers need to re­pay that mort­gage to the bank which is a se­ri­ous long- term com­mit­ment.”

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