Property prices have been steadily increasing, so investors and those who are interested in purchasing a new home for themselves may have to choose an alternative way of paying for it. This would also be a perfect approach for those whose accounts are in the red or people that don’t have a steady income.
Before embarking on this journey on your own, it is good to contact a professional. Mortgage brokers are the ones to turn to as they will be able to shed a good light on your financial status, present you with several different options and obtain a loan for you in case you need one. Moreover, these people deal with a great number of financial institutions instead of just working with big banks, which can be rather helpful in this situation.
With these points taken into account, here are 3 key methods you can use for financing your next property purchase.
1) Financial Institutions Backed by the Government
In both South and Western Australia, there are government mortgage providers which are there to help out the people whom the mainstream lenders cannot. For South Australia, there is HomeStart Finance and KeyStart Finance for Western Australia.
People who have a problem with issuing a deposit will greatly benefit from this as they will lend up to 97-98% of the amount needed for purchasing, and you won’t need to have mortgage insurance because they are self-insured. The mortgage providers are even able to help the people with a negative credit history, taking into account income coming from the government, like Family Benefit, as long as they know that they will be able to meet their obligations. Those with a sporadic or an unsteady income will be able to benefit from this, too.
The interest rates are a bit higher this way and the loans are for owners/occupiers only, but as long as you’re not looking to purchase an investment property this can be an excellent method to pursue.
2) Shared Equity Loans
This is ideal for someone who possibly doesn’t have the means to buy a home in a better suburb with better schools, as the KeyStart Model provides a part of the whole sum that is needed for purchasing a property, while asking for a proportion of the equity.
HomeStart in South Australia will provide 30% of the purchase price but recover 42% of the final sale price by taking a 1.4% of the growth in the sale. KeyStart in Western Australia will recover equity only on 1:1 basis, meaning that a 30% deposit will return 30% to them. With both of these, the buyer will be able to buy back some/all of the shared equity, reducing the amount recovered on sale.
3) Other Programs Offered by the Government
While this model has yet to go live on a national basis, it’s nice to know that every State has a government program of their own, designed to help people in many different circumstances. These programs are not solely designed for first home owners grant, but it’s advisable to consult a mortgage broker to make sure you can gain access to them.
As with all real estate decisions, if you’re unsure of the steps to take, get in touch with an experienced professional. In this instance, a professional mortgage broker will be able to provide advice tailored to your specific needs.