Getting your foot in the door of the real estate market is a priority for many. For many years, real estate has represented the great Australian Dream. However, not many of us can pay off a home loan in 5 years. Paying off your home loan quickly requires time, energy, commitment and most importantly, money.
If you have used our mortgage calculator and the necessary amount you were hoping to borrow just isn’t realistic, then consider these other options to get you on your way to purchasing your new home.
Does buying a home seem a little unrealistic? Then, consider these other options:
1. Consider investment opportunities
If the property you wish to purchase has too high a price tag and your repayment amounts and periods are unrealistic, then you might wish to consider purchasing a property to live in and looking to more affordable areas that are prospected to have a housing prices rise. Rising housing prices could be projected for areas which have received an infrastructure investment from the government that would bring better transport and facilities to the area.
Things to consider when investing in property include:
- Does the rent from your future tenants cover the interest you are repaying on the loan?
- Have you considered additional costs such insurance, future potential maintenance on the property, strata, stamp duty, council fees, property fees and land tax?
2. Buy as a group
Whether it’s sharing an investment property with friends or getting financial support from your family, these options can take the pressure off your wallet. If you decide to enter a property scheme or a shared equity scheme to split the cost of purchase and the responsibilities of management then be sure to do you research. You’ll want to ensure the people you choose to invest with are reliable, knowledgeable and the investment is worthwhile for you.
3. Family Pledge Loan
If your family is happy to put their hand up to offer financial support, then consider a Family Pledge Loan. Our Family Pledge Loan means you don’t need a deposit to borrow for your property, as you have a commitment from family members. To secure a Family Pledge Loan it would require a relative to use their home as equity. This family member would act as a guarantor for a proportion of your loan. When you’ve built up enough equity, you could remove that family member from the commitment and take full responsibility for the loan yourself.
4. Research, research, research!
You might get sick of it, but you can never underestimate the value of research when considering purchasing a property. If your number one objective is to gain a return on your property as an investment, then we especially recommend doing your research into the area you will be investing | Greater Bank
- Consider areas where the cost of the property is less than the rentals as this will give you a greater chance of receiving a better return when you go to rent your property out.
- Check the amount of vacant properties in the area you’re considering buying in and the growth of the suburb as this can help reflect the viability of rentals in the area.
- Investigate any planning to be undertaken in the area. This planning could be a deterrent to future renters or an incentive.
5. Find other ways to save!
Why not look into ways you could save money on purchasing your new home? For example, when it comes to securing your home loan we recommend you:
- Try to secure a low rate: Speak to your home loan expert and see what you need to adjust to secure a low rate.
- Pay fortnightly: Split your monthly repayments in half and make your repayments every two weeks. As there are 26 fortnights a year, you will make an extra month’s repayment by the end of the year; effectively reducing your interest and contributing more towards the principal of your loan.
6 Current Government Schemes
- First Home Buyers assistance: In NSW, people who are purchasing or building their new home and meet the necessary requirements can receive a duty concession. This means they avoid paying stamp duty. But, before you too get excited, make sure you check the fine print. This concession is only for new homes up to $650,000 and vacant land between $350,000 - $450,000.
- Negative gearing: If you have purchased your property and are renting it out, but something went wrong and you are not getting a worthwhile return on your property, then you may qualify for certain tax benefits. In simple terms, this means that you may be able to claim that loss on your property as a tax deduction.
If you are still feeling uncertain about whether you will be able to afford a home loan, then feel free to stop in at your local Greater Bank branch and speak to one of our home loan experts. They can assess your borrowing power and offer guidance on how to apply for a home loan. We never recommend taking out a loan you cannot comfortably afford to repay, so it is important to be upfront with your financial situation so we can offer you a realistic home loan plan.