Guide to Buying your First Home

20 GUIDE TO BUYING YOUR FIRST HOME Ask your parents for help, I am sure if they are in a financial position to help they will. The worst thing that can happen is they say no. The bank will take a gift into consideration as part of your deposit however, they will still want to see that you are capable of saving money, so some form of proven savings history is required. The bank will consider rental payments favourably so good rental history plus proven savings is preferred. Buy with Friends As I have said earlier, it is important to buy as soon as you can, and it is worth exploring other options to secure your first home. If home buying seems out of reach, consider buying your first home with friends or relatives who are like-minded. Combine your deposits and buy the home in joint names. You may decide to enter into an agreement setting out the terms of your arrangements. You might like to document what would happen if anyone wanted to sell, for instance. Or you may agree you will all live in the home for a period until you all have enough funds in the home to sell the property and buy your own home. Mortgage Insurance Mortgage insurance is a policy the bank takes out against you if you are viewed to be at risk of defaulting in any way. The bank bases the need for this policy on the amount of your funds (or deposit) you have for your new home. The amount the bank requires you to have to avoid the need for mortgage insurance is 20% of the purchase price plus any outgoings. Outgoings are such things has bank application fees, conveyancing costs and stamp duty. Most first home buyers I have dealt with over the years do end up paying mortgage insurance, and the cost of the insurance gets added to your loan amount so there is no need to stress over mortgage insurance. Do not delay buying because you need to pay mortgage insurance. Only the lucky few with huge savings capacity manage to avoid this when buying their first home. Your goal should be to get started as quickly as possible.