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A Single Person’s Guide to Buying Property

Entering the property market solo can be a daunting prospect. Check out our 8 top tips.

Buying property is probably one of the most daunting pillars of adulthood. For many young people – even if they’ve managed to cull their avocado toast consumption down to near zero – the prospect of home ownership feels impossibly out of reach. For single’s the whole situation is even more overwhelming and the goal posts are higher for anyone looking to shoulder all the research, responsibility and savings on their own. 

That being said, we’re here to help with our tips and tricks for any singles on the lookout for a first home, investment property or land package. 

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Aim to Be Debt-Free 

To make sure you’re starting out on the right foot, it’s important to pay off any high-interest debts before you start to think about applying for a home loan or putting on an offer on a property. Paying off debts like credit card repayments or car loans will help you secure a better home loan and free up money for mortgage repayments. As a single, your debts are yours and yours alone, and having debts paid off will not only prove your financial security but will allow you to focus all your savings towards down-payments or mortgage repayments.  

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. Unfortunately, this means cutting back on many of our favourite things from takeaways to soy lattes, health and beauty treatments, and ride-shares and taxis all add up and can dramatically affect your ability to service your home loan. 

Know Your Brief 

Before you start any search, it’s important to know what you’re looking for. The most important parameter in your property search would likely be the amount you can afford to spend, as a single person, there’s no second income to get you over the line so defining the upper limits of your budget requires some serious thought.  

In addition to a price range, you should also make lists of non-negotiable things your looking for in a home and a second list of things that would sweeten the deal but aren’t absolutely essential. For example, a second bedroom, access to good public transport and an outdoor space might be absolute must-have but ocean views and a property walking distance to a bar with a margarita happy hour might just be an added bonus.  

Research Grants and Schemes 

While buying property is undeniably tricky for single people, 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. 

Consider a Guarantor Home Loan 

Saving up for a home loan can be difficult for a couple and is doubly as challenging 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. Don’t fret, your loved ones won’t be asked to hand over all their hard-earned cash, a guarantor loan simply means someone can use the equity built up in their home as collateral or security to guarantee part or all of the deposit.  

This process allows you to enter the property ladder and pay just a fraction of the traditional deposit (or even no deposit at all!) and avoids having to pay 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 guarantor and acknowledge that defaulting on your loan puts your loved one in a very precarious financial situation.  

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Consider a Joint Mortgage 

Just because you’re single doesn’t mean you need to buy a house alone. You could always consider a joint venture arrangement with a family member or friend with you both going in on the purchase and set out ownership percentages. Remember, even if you’re best mates, all arrangements should be documented and appropriate rental agreements should be implemented if only one of you will be living in the property full-time. 

Enquire About Mortgage and Income Protection Insurance 

To quote the boy scouts, it’s important to be prepared in every scenario, when it comes to buying property in Australia, mortgage protection insurance protects you in the case you can no longer repay your home loan because of certain unexpected events such as unemployment, critical illness, injury or any other major change to your financial situation. Income protection insurance will also pay part of your lost income if you're unable to work because of a disability caused by illness or injury and would help you to meet the demands of your mortgage. 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 (whether you’re doing it alone or as 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. 

Still finding yourself mystified by the property market? Check out The Sitch, our easy-to-understand guide for first-time property buyers.

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