Q. Post-GFC there seem to be less options for people with small deposits to get into the property market, so what are my options and how much can I realistically borrow in today’s ‘responsible-lending’ climate?
A. Small deposits are a problem at the moment. There are not many options if you do have a small deposit – but there are two things that you can consider.
The first option is to get in the old-fashioned way – trying to save more. Since the GFC, the options for high LVR (loan-to-value) lending have come back a little bit and you often need a bit more to get started. There are options however to still gear to the 97 per cent mark. So it won’t take you long to get that deposit to get into the market if you put a good savings plan in place.
The second option, which would bypass that need for the deposit, is asking a family member who has an existing property or multiple properties if they’re happy to go as a guarantor – if they will allow you to use that property as security. That will allow you to jump into the market with a smaller dollar amount.
Paul Myliotis, general manager, Oasis Property