How Nina from Prestons NSW purchased her first property with ALMOST zero deposit

By Shane | Uncategorized

Jan 26

Buying your first property can be daunting. Especially if you live in Sydney and are witnessing property prices continue to rocket skywards. On the surface, saving a deposit for your first home can seem an impossible task, so how is it that Nina could buy her first property with ALMOST zero deposit?

The situation

Nina had always dreamt of owning a property however she just couldn’t see it happening for a few years. She works for a local small business in Liverpool and earns an average income. The big advantage that she had was that she still lived with her parents, so rent was not an expense that she had to worry about. Even though her living expenses were below average, she was not able to save a substantial amount of money because she had a few credit cards and personal loans that were slowing her down.

Nina wanted to get on to the property ladder but she didn’t want to have to compromise on her lifestyle… too much. After all, like most other Gen Y’s, she absolutely loves travelling.

So how did she do it?


She decided to invest first

Nina had never heard of ‘rentvesting’ before… until she met Pearl Financial… so we explained to her that the rent from her potential investment property purchase could be used towards her income that the lender will take into consideration when reviewing a loan application. Nina was excited, but she had one question…


What about her personal debt?

An option that was identified was that the high-interest personal debts MAY be able to be consolidated into the new home loan. This would have the effect of lowering her existing debt repayments and reducing her non-tax deductible interest charges. Moving personal debt from above 15% to around 4% is kind of a no-brainer…

There was still a big hurdle to overcome…


She had no deposit…

Nina had been putting all her surplus income towards her personal debt so she had no savings to speak of. Pearl Financial, through their specific First Home Buyer Formula, discussed a number of options available to her. After Nina considered her options, she discussed with her parents the possibility of them going guarantor for her new investment loan. Her parents were more than willing to help her purchase her first property, so they offered a very small portion of their property as security.


She leveraged the expertise of Pearl Financial

Nina worked closely with Pearl Financial to work through the opportunities and risks associated with her specific personal situation. Pearl identified a lender that would consider:

  1. Allowing her to use potential future rental income as part of her income in any investment loan application;
  2. Allowing her to use her parents as guarantor for an investment property purchase; and
  3. Would allow her to consolidate her personal debts into a home loan with a much lower interest rate.

Pearl reviewed over 25 lenders and thousands of loan products to identify the most suitable lender for her personal situation. Once the lender was identified, Pearl helped Nina secure a pre-approval, giving her the confidence to search for her new investment property with confidence.


Now for the property search…

Nina found a property in a relatively lower cost capital city (i.e. not Sydney). Armed with the pre-approval from her lender, she was able to make an offer on the property, which was accepted shortly after. The seller of the property wanted a sign of commitment, and even though she had full pre-approval for the entire purchase price of the property, she offered $1,000 as a deposit…

So, it wasn’t exactly a zero-deposit property purchase but, hey $1,000 is not too bad to get you on the property ladder, right?


The bottom line

Nina was able to enter the property market much earlier than she expected using the expertise of Pearl Financial, a specialist first home buyer mortgage broker. She was able to:

  • Buy her first investment property with a $1,000 deposit,
  • Consolidate her personal debts, drastically reducing her interest charges,
  • Get into the property market years ahead of schedule,
  • Start earning a passive income from her property investment,
  • Claim substantial tax-deductions relating to her new property,
  • Not compromise on her lifestyle… much…


What’s next for Nina

Now that Nina is in the property market she is already planning on making her next purchase towards the end of 2017. She has decided to compromise on her lifestyle (a little…) to allow her to purchase her next property quicker than what may have been possible otherwise.

Her next property will be for her to live in, however in the meantime, she is will be receiving passive income from her investment property as well as accumulating any capital gains on the value of the investment property.


Could this work for you?

Nina’s path to property ownership utilised a few strategies that are available to first home buyers… but not all the strategies available….

If you are wondering whether you could enter the property market years ahead of schedule with almost zero-deposit, then get in contact with the team at Pearl.


Pearl Financial is a specialist mortgage broker who aim to help 100 Australian first home buyers to enter the property market in the next 2 years.



Author: Shane

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