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Fastest Way to Save a Home Deposit

26 August 2016
Cash strapped first-home buyers are resorting to moving back in with their parents to fast track their ability to save for their own home.
 
One in four entry-level buyers are using their parents as a way to make their property dream come true, new survey results from homeloans.com.au found. And those most likely to do this are in the 25 to 34 years age bracket.
 
Teacher Britt Butler, 25, and her fiance, electrician Ryan Munt, 24, both moved back in with their own parents to help save a decent deposit before they purchased their three bedroom home.
 
“We started to think about saving for a home a couple of years ago, so we both lived back with our parents and then a couple of months ago we could afford to buy,’’ she says.
 
“I was still studying to be a teacher and working part-time as a pharmacy assistant so I didn’t have a reliable income but our parents didn’t charge us any rent and we helped out with chores like cooking.”
 
Munt’s parents also went guarantor on the couple’s home loan, this is becoming more common among first time buyers and allowed them to escape paying hefty lender’s mortgage insurance.
 
A guarantor home loan is when another person, usually a parent, puts up their own property as security, and they hold responsibility if the borrower defaults on the loan.
 
Mortgage Choice spokeswoman Jessica Darnbrough says while moving back in with parents can make saving easier, the goal should be to save at least a 10 per cent deposit.
 
“With interest rates sitting at record lows, servicing a loan has become less of an issue for first time buyers,’’ she says.
 
“For anyone considering moving back in with their parents to save money, the key is to be diligent.”
 
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