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Tuesday, 17 April 2018 00:00

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how your parents can help you get into your own home sooner

Most of us aspire to own a home and create a space where we can relax and unwind after a long week, whether it be an apartment, townhouse or house on a block of land. But with property prices skyrocketing over the past decade so many ‘would-be’ first home owners are still renting or living with their parents.

Where to start?

Most of us aspire to own a home and create a space where we can relax and unwind after a long week, whether it be an apartment, townhouse or house on a block of land. But with property prices skyrocketing over the past decade so many ‘would-be’ first home owners are still renting or living with their parents. Finding enough for a deposit is one of the biggest challenges, usually recommended to be 10% of the purchase price to avoid lenders mortgage insurance. But 5% deposit is sufficient if you’re happy to wear the insurance costs and added interest over the life of the loan. 

But what if you don’t have the ideal deposit amount or any deposit at all? Does it mean you have to give up your dream of owning a property all together? Not necessarily, thanks to what is hopefully a relatively good relationship with your parents and the Equity from their home…

Just imagine being able to finally buy a property you can call your own. No more landlords, no more share houses (unless you want to), no more hideous carpet or living with the folks. Ah…bliss…  By unlocking the equity from your parent’s home you have the opportunity to buy your own property and your parents can rest assured they have helped you to reach your goal. Plus they can get back to enjoying their retirement in peace and quiet and turning your old bedroom into a hobby room!

Here's how it works:

The Endeavour Mutual Family Helper Loan enables you to secure a mortgage using the equity from property owned by your parents. What is equity exactly? It’s basically the difference between the market value of your home and the amount your parents owe on their mortgage. So it’s whatever has already been paid off on the property. If they own the house outright there is more equity to play with, if they own half or a quarter of their home then the equity is equivalent to half or quarter of the market value of the property. If your parents were to sell their home, the equity would be the money left over after the mortgage had been paid in full. 

Effectively your parents guarantee part of your home loan and provide additional security over their property. This can help alleviate the need for mortgage insurance if you don't have much of a deposit, however you will need to be able to afford the repayments without your parent's help.

Some of the advantages of the Family Helper Loan:

Buying a property is a massive financial decision and needs to be carefully considered. Everyone's financial situation is unique so speaking to a home loan specialist is the best way to truly assess if you can afford to venture into the property market. However there are certainly many rewards to owning your own home. We have been assisting people with purchasing property for over 60 years and the support we offer you is personalised and professional. We have a simple and straightforward loans process that offers fast approval so you can focus on finding your desired property and secure a purchase. Click here for more information about how Endeavour Mutual Bank can help get you into your own home or visit one of our branches to find out more.