Tired of Renting?

Are you tired of renting, but feel trapped and think home ownership is just out of reach? The repayments on a home loan too much and trying to scrape that deposit together - near on impossible!

Maybe it's time to sit down and re-visit the numbers and see what you can and can't do and you may be surprised, given the current low interest rates on offer.

The cost of owning a home can sound particularly daunting and most renters are put off by the thought of owing $400k, $500K and so on. It seems like a massive amount of debt and the numbers are terrifying to someone who earns $60K a year and the most expensive item they've ever purchased is probably a $20K car.

There are certainly ways you can cut that debt down to size and when you're renting a home and paying $480 a week, essentially you are already paying a mortgage - it's just not your mortgage and effectively, you're making someone else wealthy, at your own expense!

So, what can you do?

First you need to sort out that deposit. Some lenders are still doing loans on relatively small deposits. The more traditional lenders are looking for a little bit more of a commitment and seeking something like a 10% deposit. If you're a first home buyer, you can at the moment still access the government grant, which gives you $10K. Then if you can put down a couple of $K to secure a block and then pay a builder $2K to get the ball rolling, you're about a third of the way there. That will then give you a bit of time to gather some more dollars. Some credit providers will also take into account the amount of rent you pay over the course of a year, if it's done through a recognized realtor.

Another option is to have a chat with your parents and see if they can provide you with a short-term guarantee. This is limited to the amount required to get you to a reasonable level of deposit and at the same time will also save you some costs in fees. Once you have further increased your equity in the home, the guarantee is discharged and your parents are released. And your underway in the property market.

With a bit of structuring, you could buy a $500K home and based on a 10% deposit, you could be paying as little as $345 a week in home loan repayments, compared to $480 a week in rent!!!

Obviously this will vary from lender to lender and also the structure that you ultimately go with.

However, it does raise the question - can you afford to keep renting???