How to get into your first home
This week I met with a gorgeous couple who are rapidly saving for their first home, but, given prices in Sydney and the cost of rent the whole process is taking longer than they want it to so we are looking at alternative options.
They’re saving really rapidly, more than a thousand dollars a week – but to get into an established home in their area they really need to have close to $50,000 saved, and prices in their location are still rising (albeit slowly) so in essence they are chasing their tails a little, although of course I encourage them to keep saving.
Another option on the table is to ask (beg?) parents to offer a limited guarantee to get them started, this both avoids mortgage insurance, is a smaller burden on parents, and beats the price rises; effectively you’re ready to go.
We also explored buying a new home as a first home buyer because there is economic land in their area which would qualify for the First Home Owners Grant (presently $10,000 in NSW) and stamp duty exemption (worth an additional sum of around $16,000 in savings), which significantly reduces the amount they have to save.