Finance and ‘Flying the Coop’
Friday 23rd September 2011 - 5:13pm
You’ve made the decision to purchase your new home, which is a an exciting start, but once that’s done, where to next? There’s a myriad of questions probably working their way through your head, including the big one – finance, but dont worry – you dont have to go it alone.
Commodore’s Finance Specialist Candy Wong can give you advice on exactly what options are available to you, in particular, the grants which are available to first home buyers.
“There are various loan options available for first home buyers to suit their specific situation. Lenders have loans tailored for first home buyers which allow low deposit, Parental guarantor assistance, the utilisation of government grants and capitalisation of lenders mortgage insurance to assist first home buyers with obtaining their first home purchase sooner,” said Candy.
But what does this all mean? You will have to start with something, so start stashing it away as soon as you can. Most lenders require a minimum of five percent, but government assisted loans require only four percent and one lender is offering an exclusive 3% only deposit (Eligibility & Conditions Apply). However if your parents are really keen to move you onwards and upwards (and out of their place) there’s always a Parental Guarantor Assistance.
“This is a great step up for first home buyers if they have cooperative parents who have equity in their property to utilise,” said Candy.
“This means that the lender takes security over some real estate owned by the guarantor, such as a mortgage over the parents’ house or if they already have a loan on their property, then some lenders can take a second mortgage. This is a sort of ‘win win’ situation for everyone involved — the banks risk position is reduced if you can’t make your repayment, the kids get their first home and the parents get to move the kids out of home. If you’re going it alone and borrowing up to eighty percent of your new home’s value, lenders will often charge a once off Lenders Mortgage Insurance fee to protect themselves in case you default on your loan, and that can be expensive. And once the value of the home has appreciated in value, the parents can renegotiate with the lender to release themselves as guarantors from the loan,” she added.
For more information on Parental Guarantor Assistance, contact Commodore Homes on 1800 266 263.