If you have a stable income but don’t have the cash for a deposit, an expert may help find a way to turn your dreams into reality.

Robert and Brooke had a good, solid income but they didn’t have a sufficient deposit to be able to buy a property. They had been knocked back after visiting various lenders, but, when they went to see their local MFAA Approved Finance Broker for help, it turned out that they just hadn’t been given good advice.

Their finance broker suggested that they take a different approach and use family equity in place of a deposit. This meant including the value of the parent’s home in the total property valuation for the loan to bring their loan to valuation ratio (LVR) down to 80 per cent.

As for the parent’s concerns, the finance broker was also able to explain the implications and the flexibility they had in terms of selling their property or downsizing. He helped them to understand that they could still help out without carrying a large financial burden or altering any plans they had.

Robert and Brooke’s application was approved, so they no longer had to delay and miss out on their purchase. They also avoided paying lenders’ mortgage insurance (LMI). Four years later, they have been able to refinance, eliminating the family property from their home loan arrangement and maintaining the loan on their own.

With the equity in their home, they are now working with their finance broker on a plan to purchase an investment property, which they would never have thought was possible four years ago when they had been told they couldn’t buy at all.

*Names have been changed to protect the client’s privacy

This case study was provided by John Sinclair of Mortgage Choice, Sydney.