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Buying property is a daunting prospect and can be even more overwhelming for singles – particularly if you’ve previously lived with someone and shared expenses. But that’s not a reason to rule it out completely.

In this blog, our agents outline top tips and considerations for singles in the market for a new home or investment.

Aim to be debt-free

Before you even think about applying for a home loan or putting on an offer on a property, it’s essential to pay off any high-interest debts like credit cards. Paying off your other debts, like a car loan, is also a good idea. Clearing debt will help you secure a better home loan and free up money for mortgage repayments. Remember, as a single, your debts are yours and yours alone, so you must be able to service all loans in your name.

Cut down on everyday expenses

As well as debts, banks consider your everyday expenses when assessing your viability for a home loan. Start cutting down on your day-to-day costs at least three months before applying for a loan. Takeaways, barista-made coffees, health and beauty treatments, and ride-shares and taxis all add up and can dramatically affect your ability to service your home loan. Getting in the habit of becoming self-sufficient and saving will help you, in the long run, to pay off your home loan.

Know your brief

As a single person, it’s critical to know what you are looking for and what you can afford to spend. You can get lost in choice unless you set some clear parameters and there is no second income to help you get over the line in a place you cannot afford. Living alone also comes with extra security concerns and requirements, so make sure you list your non-negotiables in your brief. For more information, read our blog, How to write a property search brief.

Research grants and schemes

There are several government grants and schemes on offer to Australian home buyers, which are worth researching before getting your heart set on a specific property. Taking advantage of schemes like the First Home Loan Deposit Scheme, First Home Super Saver Scheme, The Family Home Guarantee Scheme (FHG), or First Home Owner Grant (FHOG), as well as stamp duty concessions, could save you a lot of money. Grants and schemes vary depending on the state in which you intend to purchase property. For more information, read our blog, Grants and schemes available for buyers in 2022.

Consider a guarantor home loan

Saving up for a home loan can be difficult for a couple, let alone for a single person. Thankfully, most of Australia’s largest banks and lenders offer guarantor home loans for close relatives wanting to support their family to buy property. A  guarantor loan means that they don’t have to give you money. Instead, they can use the equity built up in their home as security for part or all of the deposit. Having a guarantor can mean getting away with having little to no deposit and avoiding paying Lenders' Mortgage Insurance. This type of home loan could save you a lot of time, but it’s essential to be aware of the risk to your family.

Consider a joint mortgage

Just because you’re single doesn’t mean you need to buy a house alone. You can decide to enter into a joint venture arrangement with a family member or friend and set out ownership percentages. All arrangements should be documented and appropriate rental agreements should be implemented if one party occupies the property.

Enquire about mortgage and income protection insurance

Mortgage protection insurance protects you in the case you can no longer repay your home loan because of certain events such as unemployment, critical illness or injury. Income protection insurance pays part of your lost income if you're unable to work because of a disability caused by illness or injury. While these types of insurance come at a cost, they can give peace of mind to a single person with mortgage repayments relying soling on their ability to generate income.

Enlist support

Our best tip for buying a property (single or in a couple) is to enlist the support of an experienced agent. A knowledgeable agent will guide you through all of the steps above and stand in for you during the negotiation, ensuring you get the best deal possible. 

For assistance with starting your buying journey speak to your local Hockingstuart agent today.

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