Your Money – Ways to meet the rising cost of a first home

Posted by | November 27, 2013 | Employers, Job Seekers, Recruiters, Update

6. Phil Riches

There is a lot of news at the moment about how housing has become less affordable for first home buyers.

Many young couples and families have been priced out the market as talk increases of a new housing price bubble.

But matters are seldom as grim as the headlines suggest, says Phil Riches, a finance broker from Finance On The Coast at Avoca.

“The value of property is going up and that does make it harder for first home buyers to get into the market,” Mr Riches said.

“But there are often ways that this can be overcome.”

It starts with getting the right advice.

“It’s a common misconception that parents who opt to help as a guarantor do so for the entire debt that their child is taking on.

“They can even help out as a guarantor without the need to offer their property for the guarantee if they have significant savings they are prepared to put on term deposit and offer it as security”

For example, a parent could go guarantor for a child’s first house to the value of 20 per cent, plus transaction and set-up costs.

This provides the deposit but limits the exposure for the parent, while it enables the couple to borrow up to the full purchase price of the home.

The arrangement can be structured so that the guarantee can be dissolved when there is sufficient equity in the purchase, Mr Riches said.

“The key with any arrangement is to get clear legal advice, and we insist on that every time,” he said.

There are benefits and pitfalls with every arrangement, but there are many that can bring a couple or family to the point of being able to buy a home.

“It’s important to get advice on all of the options so the best choice can be made.” Mr Riches said.

Phil Riches can be contacted on 1300 081 522, by email at, or by mail at PO Box 326, Avoca Beach, NSW 2251

Further information is available at

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