Myth 1: You need 20% deposit to purchase a home…

Banks fail to tell you the required amount you ACTUALLY need and the different options available to you. They will however, always tell you that you need 10-20% deposit to buy a home. You do need some form of deposit to buy a home, however, 20% is not accurate in all circumstances.

The current options other than 20% deposit

These days you in fact do not need anywhere near that amount, you actually only need 5% deposit.  How can you make up this deposit? Up until recently you had to show that you saved the deposit or at least, that it has been in your account untouched for 90 days. Have you ever tried to save money while paying all your other bills you need to survive? It is near impossible these days. You can now source your deposit from many places. For example:

• It can come from a gift, parents, friends, or just about anyone.
• It can come from part genuine savings and part gift.
• It does not always have to be proven to be genuine savings (depending on the bank), it could be a credit card, loan from family or from selling a car, boat or other toy you might own.
• First home buyers can use the First Home Buyer Grant to fund their deposit.

So each of these scenario’s will have knock on effects.  However the old days of the only support available meant parents going guarantor (and putting their property on the line) are well past us.  In some instances a good discussion with the family accountant will also provide benefit around how to best structure any gifts or other supports particularly from family members.  Once we map out the fiance puzzle for a clear path ahead there will be some other great conversations to have all about securing your financial

With many different scenarios around it is best to talk with a qualified broker who can evaluate your situation and give accurate guidance.  If you found this helpful you may also like this article here.