A new way of finding finance
There’s a new ‘finance provider’ kid on the block!
With soaring property prices and stringent lending criteria, finding finance, either through the big banks, or through a broker may be challenging for investors and first-time home buyers alike.
This is why Social Funding, a concept developed by the company MyBrix, has been developed.
Social Funding aims to help people to buy property with the help of their family and friends. Through the Social Funding platform, individuals can tap into their wider social network, including family and friends, to collectively fund their property purchase.
Eliminating the need for a traditional bank loan, the company claims it will potentially save property buyers hundreds of thousands of dollars on interest payments and years off the term of a traditional mortgage.
Like a “go fund me” fundraising project, once you’ve created your property funding project on the Social Funding platform, the idea is, you then reach out to family and friends. They then express their interest in participating and indicate how much they can “invest” in your potential property purchase.
According to the website, investors can: ‘create a win/win for you and your wider social network and fund a property without a bank. When you have family and friends who want to provide funding, both you and your fellow investors get a commercial return on their investment.’
Meanwhile, if you’re looking to buy your first property, but can’t qualify for a loan or save sufficient deposit, MyBrix says: ‘When you have friends and family who are willing to participate in funding your property with investments a little as $1,000. Collectively you and your wider social network can join together to fund 100% of your property purchase.’
Find out more about Social Funding and how it works here.
Bear in mind, asking friends and family for finance may come at the risk of souring relationships, so we advise doing your homework on the platform and to proceed with caution.
We also advise to seek independent advice from a financial specialist before signing on the dotted line. A special can advise accordingly on the appropriateness of using this type of finance and what the risks are. For investors, a financial specialist and/or your accountant will advise how it may affect your financial situation and your property investment, goals and objectives.
New places for first home buyers available under the Australian Home Guaranteed Scheme
While we’re talking about finance, if you are a first-time homebuyer, now might also be the time to take advantage of the 50,000 new places available under the Australian Home Guarantee Scheme (HGS), which came available from July 1, 2024.
The HGS is an Australian Government initiative administered by Housing Australia and available through 32 participating lenders.
Real Estate Institute of Australia (REIA) President Leanne Pilkington describes the HGS as a “proven tool” to help homebuyers enter the market despite supply shortages and affordability challenges and the scheme has already helped 160,000 Australians purchase homes, including first-time buyers, single parents, and people in regional areas.
For the 2024-25 financial year, the 50,000 new places are distributed across three Scheme Guarantees:
- 35,000 places for the First Home Guarantee (FHBG)
- 10,000 places for the Regional First Home Buyer Guarantee (RFHBG)
- 5,000 places for the Family Home Guarantee (FHG)
Leanne advises: “The best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker who secure up to 80 per cent of the HGS placements and can advise prospective first-time buyers on their options.”
Find out more about the HGS here.
We do more than manage and sell property; our aim is to give you information to help you make informed decisions.
If you are interested in learning more about how our property management services can make your life easier, get in touch.
With nearly 50 years of property management experience behind us, we’ve helped thousands of people realise their dreams through property and our aim is to make your life easier. Simply give us a ring on 02 4954 8833, send us an email to mail@apnewcastle.com.au or call into our Cardiff office to speak to the property management team.