If you want to get into the property market but only have a small budget to do it with, buying a home can sometimes seem like a daunting task, especially considering today’s relatively high home values. Bargain homes may be getting more difficult to find, but with a little creativity you can get into the home market without outlaying a small fortune – here are some top strategies to get you started.
Consider an interest-only loan – many lenders offer interest-only home loans for up to seven years of the repayment term, meaning you’ll only have to repay the interest on your home loan rather than the principal, and so your monthly repayments are significantly reduced. If you’re thinking of getting an investment property, this could be a good option for you, as you can make smaller repayments, rent out your property to make up the difference, and (hopefully) make a profit once you sell the property and pay back your loan in a few years’ time.
Buy a home with friends – if you’re single it can be tough getting the savings and buying power together for a home loan, but buying a home with friends or family is a good way around this. You can club your deposits and incomes together to get a leg up in the property market, and look to buy your own home later in life with the money you make from the eventual sale. However, you should always consult a lawyer before entering into this option, to be sure of your obligations if the other party wants out of the arrangement down the track.
Buy for investment, not lifestyle – if properties in your desired area are too expensive for your current budget, consider buying an investment property in a less expensive area. You can still rent in your desired area, or live at home, while you do this, and the capital growth you receive from your investment will hopefully help you get to your goal of owning the home you want faster.
Buy a fixer upper – This is a good option for those who are handy with a tool kit and a paintbrush, as homes in poor condition can go for significantly less, even in good neighbourhoods. Of course, you’ll need to be confident you can do much of the renovation work yourself or with the help of friends or family, as you don’t want to get into a situation where renovating the home in itself becomes a large add-on cost. It’s not as easy as it looks on the home renovation shows!
If you’re looking to buy a home on a tight budget and are wondering what your options are, Choice Home Loans can help. Our knowledgeable brokers are experienced with home loans of all types, and can help you choose a product that manageable within your financial circumstances. Make an appointment to talk to one of our friendly staff today.
Garry Dowd – Head of Choice Home Loans