How to get a foot on the property ladder

With the current challenges facing the housing market, many people worry about being able to afford their own home. Here are a few tips to help you take that first step onto the property ladder.

With the current challenges facing the housing market, many people worry about being able to afford their own home. But there are still some innovative pathways to follow to make your dream a reality. Here are a few tips to help you take that first step onto the property ladder.

Reduce the deposit you need to save

With house prices rising and many banks requiring a 20% deposit on a home, saving for a deposit is the first major barrier many home buyers face. One way to break down this barrier is to consider a lender that offers a low deposit loan.

At HomeStart, we offer several low deposit loan options so that you can begin your journey to owning a home. If you have a Certificate III or higher, our Graduate Loan offers a great low deposit option– from as little as 2% to buy an established home or 5% to build. Alternatively, our Low Deposit Loan could help you get into your own home from a deposit as low as 3%, and the HomeStart Home Loan offers deposits from 5% for established homes and 8% to build. You will still need to pay other up-front costs, but a low deposit loan significantly reduces the time it will take you to save.

Get help with upfront costs

As well as the deposit, you will also need to pay upfront costs when buying a home, which can include stamp duty, establishment fees and Lenders Mortgage Insurance (LMI). These can be difficult to save for on top of your deposit. To help with this, HomeStart doesn’t charge LMI, potentially saving you thousands in upfront costs. To assist with other costs, HomeStart’s Starter Loan is an addition loan of up to $10,000 to cover fees and charges, with no repayments for seven-years and no interest charged during this time.

Boost your budget with the Shared Equity Option

If it seems like buying a home is just out of reach, HomeStart’s Shared Equity Option (SEO) can boost your budget by up to 25%. How does it work? Essentially, you are the owner of the home but you share some of its value with HomeStart. This can provide you with more options by boosting your home buying budget without increasing your monthly repayments. With this additional loan, HomeStart doesn’t charge interest on the shared equity portion of your loan, instead when you sell the property, HomeStart shares in any gain or loss in property value. Alternatively, if you are on a lower income, you may be able to borrow more to boost your budget through our Advantage Loan of up to $70,000.

Take advantage of being a first home buyer

There are also additional schemes to assist first-time buyers, such as the First Home Owner Grant. This is a one-off payment of up to $15,000 for eligible first home buyers from the State Government and can be used towards upfront costs or once you are in your property. The State Government also offers Stamp duty relief for eligible first home buyers on a new home, an off-the-plan apartment, or vacant land to build your home on.

It's important to remember that you’re looking for your first home – not necessarily your forever home. By using some of our tips to make your first step onto the property ladder, you’ll be able to build equity in your home. That means you can work towards moving to another home as your life circumstances change. For more tips on how to take that first step onto the property ladder, you can attend one of our free Home Buyer Seminars or check out our help and resources page