Buying a Property With Little Money Jul 29, 2021 | Blog While it’s true that you do need some money to buy a property, there are several ways you can still get into the property market with little money down. Guarantor Loan As house prices have increased dramatically over the past decade, more and more people are turning to their parents/guardians to help them get into a property. The most common way they do this is through what’s known as a guarantor loan. This type of loan works, with an immediate family member putting up some of the equity in their home, which is, in effect, a deposit. If you are looking to borrow above an 80% LVR, you are required to pay Lenders Mortgage Insurance (LMI), which can be very high. First Home Loan Deposit Scheme The Federal Government has recognised that there are many first home buyers out there who would like to buy a home of their own but might not have the luxury of having a parent act as a guarantor. Because of that, they recently introduced the First Home Loan Deposit Scheme, in which the Government effectively acts as the guarantor on your deposit shortfall. This means you can buy a home with an LVR of up to 95% and not pay LMI. This is hugely advantageous to first home buyers who will likely also not have to pay stamp duty. Joint Venture If you’re a first home buyer looking for an owner occupied home loan, there are several loans and schemes in place to help you get into a property. However, for investors, it can be a little trickier. If you don’t have much money or equity, then it can be tough to invest in property. You will have to pay stamp duty, which alone is 4-5% of the property price, as well as LMI if you are unable to come up with a 20% deposit. One of the most common ways investors get around these issues is to partner with someone else. This is known as a joint venture, and it typically involves one person providing the borrowing capacity (finance) and the other providing cash. This type of arrangement is normally best suited to a project like a renovation or a development, with the goal of selling the property upon completion. However, some people do hold investments together using this type of arrangement. Why YFA? Our motto has always been “Honesty” and Over 20 years, we have always believed that understanding the customer requirement should be the first priority. We are very passionate about helping individuals and families to identify financial goals with the correct focus on their plans for the long run through our home loan advisor. We feel proud and blessed to win awards because of successfully assisting people to achieve financial success. What makes us stand out from others is the utmost trust from our clients who have trusted us. We have always aim to provide updated yet useful blogs by adhering to traditional values of transparency and integrity, while continuing to bring steady and consistent performance over the long term. Our home mortgage expert is always there to assist you. We love going beyond the bolts of financial crisis in an easier manner just to help people believe that money never blocks their happiness. Contact Rohit Khatak Home Loan Broker Balmain, NSW try to the best of our abilities to be a sane and trusted entity in the sector of Wealth Management via providing services in Finance & Insurance. Credit Rep Number – 418883 | ABN – 8119516623 Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.