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Buying their first home together was an important objective for David & Sarah.

They had already made the transition from living together at David's parent's house to renting their own place a few years earlier, but the biggest challenge they faced now was raising the deposit required to purchase their own home whilst also paying rent.

They had been to their local bank and were advised to come back when they had saved at least 25% of their preferred purchase price. With little other guidance given, this seemed daunting and out of reach.

So when David’s brother, a long term client of Choice Capital, suggested they speak to one of our Mortgage Brokers, they admit that they didn't think there was much point as they had only saved about half of what they thought they needed.

After a quick chat on the phone though they decided to come in and meet with both Josh and Amy so they could explain all of the possible loan structures available, provide information on the pros and cons of lending different loan amounts and percentages and offer advice on budgeting, repaying their debt and protecting their assets.

Our team produced comprehensive spread sheets for them which detailed how much they would still need to save in order to only have to lend 80% of their first property's value and how much lenders mortgage insurance would be payable if they borrowed up to 90% of the value for a range of purchase prices within their budget. They also explained how a “security guarantor” would work if they found someone who could help. Before meeting with the team, David and Katie had heard of the term “LMI” before but didn't really understand it, and they didn't know there was a possibility of using a parents home as security to avoid having to it pay it.

After going through their new found options with their parents, Katie’s Mum was interested to understand how she might use her home as extra security. This would mean the couple could potentially purchase a new home sooner as it would allow them to borrow almost all of the purchase price and associated costs, avoid them having to pay a premium for lenders mortgage insurance and yet still retain a good cash buffer for rainy days.

After receiving a pre-approval from one of the big four banks, the young couple excitedly started looking for properties. Before each auction they would give our team the address to check if it would be suitable in the banks eyes, and we also ran a free property profile on each one for them.

After 4 months they were finally successful at auction and landed a lovely 2 bedroom townhouse in Port Melbourne. They were glad to have the team at Choice Capital on hand, take care of all the extra paperwork required when using another persons property as joint security, and to answer all their questions along they way.

They are now delighted that they are no longer spending their hard-earned income on paying rent and are working towards paying down their loan so they can release Katie’s mum’s house within two to three years.

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