Finding it hard to save a deposit to buy your first home?

There are a few different options available to you in this situation:

NO DEPOSIT HOME LOANS

Some lenders will lend between 100 and  106% of the purchase price, meaning you may not need a deposit and in some cases you can finance the stamp duty.

FAMILY EQUITY LOANS

Relatives may use part of the equity in their property as security to help their children or relative to buy a home without a deposit.

An example of this would be where your daughter wishes to buy a $300,000 home.  Lenders would normally lend $240,000 (80% of the value without lenders mortgage insurance) leaving her $60,000 (plus stamp duty and legal costs) short.

If you have enough equity in your house the lender would take security against your property for the shortfall and save your daughter thousands of $$$ in mortgage insurance.

GIFTING FUNDS

Most lenders allow funds to be gifted for the purchase of a home instead of having to save the deposit over 6 - 12 months.  This is now possible even if you are retired via a reverse mortgage.

As with most things there are pros and cons with each option.

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