Saving a deposit is the toughest challenge for first-home buyers.
Many first time buyers are earning enough to borrow money but only have a low deposit to enter the property market.
The federal government has promised to provide a helping hand.
First Home Super Saver Scheme
The First Home Super Saver Scheme will allow entry-level buyers to save funds at a discounted tax rate by making additional contributions to their superannuation.
These additional contributions, and earnings made on them, would then be able to be withdrawn to be used as a home deposit.
Unlocking more housing stock
Seeking to unlock more housing stock, the federal government is also encouraging older people to downsize by giving tax breaks if they funnel proceeds from selling their home into their pension funds.
Other measures include releasing surplus defence land on the outskirts of Melbourne, and tax discounts for investments in affordable housing.
What if still don’t have enough deposit?
A guarantee allows parents to use the equity in their home as security for the new loan. This helps you maximise the amount you can borrow so you can purchase the property you want.
Technically speaking, a guarantor helps buy the property using the additional security to secure the loan. This minimises the risk to the lender and brings down the loan-to-value-ratio of the loan. Not having to pay lenders mortgage insurance can save thousands of dollars.
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