The toughest part of getting into the property market for a first home buyer is getting the deposit together. Most lenders require at least 20 percent — though tightened lending practices mean some lenders require more. But there are Government incentives and other ways to get into the property market, particularly in the Newcastle area.

Many first home buyers get help from their parents and in-laws to come up with the deposit, as Kate, the first home buyer, we wrote about a little while ago. But there are other options for first home buyers who don’t have anyone to lend them the cash.

Family pledge applications

Scott and his partner Carly* wanted to purchase their first property that they would live in together.

While Scott and Carly both had good jobs and incomes — Scott is a real estate agent; Carly a marketing executive — they were paying a high rent in Sydney, so they’d had difficulty saving for a deposit.

Because neither Scott nor Carly’s parents had money they could lend them, their broker suggested they pursue a family pledge / guarantor home loan application.

Carly’s father went guarantor on the home loan, using his unencumbered property as security against the loan.

With Carly’s dad willing to go guarantor, combined with both their incomes, the couple were able to secure a loan with St George, the best lender in the market for family pledge loans.

Scott and Carly have since purchased an apartment in Sydney — in the same building that Scott works.

First home buyers should pursue all options

While it’s certainly not the easiest time for first home buyers to enter the property market, there are a number of options available that are worth pursuing. And having a good mortgage broker to help you can make all the difference.

A mortgage broker can help you find the best lender, offering the most competitive rates. Learn more about home loan mortgages and what’s possible for you.

* Not their real names