No Deposit? No worries – A guide to no deposit home loans
No deposit home loans are the solution to the no deposit nightmare! We know, you’re tired of paying rent and someone else’s home loan. With housing prices stabilising there has been no better time to purchase your first home . Well, if only it was that easy! With the cost of renting often increasing every year and property prices rising faster than average incomes, it’s never been harder to save for a deposit. However, a new generation of online lenders now approve loans for up to 100 per cent of the value of a property.
No deposit home loans
If your bank has just told you your deposit is too small a no deposit home loan may be the answer.
Before no deposit loans, home buyers would normally need to have saved a minimum of 5% of the home price, plus purchase costs (stamp duty, etc.), to get a loan approval from a bank. Put simply, bank approval rules haven’t kept up with rising house prices. Now you just need to have saved your external costs because no deposit is required. A range of lenders, including eChoice.com.au, have recently changed their lending criteria to now allow you to borrow up to 100% of the home price, instead of the usual 95% maximum that other lenders restrict you to.
Home loan deposit help from the government
If you’re looking at a no deposit home loan remember you may be eligible for the Federal Government’s First Home Owners scheme. This one-off tax free payment of $7,000 can be used to help fund your additional expenses or in some cases may be used a deposit. Various state government schemes may also be available so check with your relevant State Revenue Office (see the No Deposit Home Loans links below).
What’s the catch?
No deposit home loans are slightly harder to get approval for. However, with a bit of planning you can get the loan you want, and the home you deserve. You’ll also need to know how much you can afford. A mortgage loan simulation is an easy way to work out exactly how much you can borrow.
Are there any hidden extras in no deposit home loans?
Remember, even with a no deposit home loan, you will still need to save for real-estate purchase costs such as stamp duty and conveyancing.
Beat the bank with a new no deposit home loan
Instead of hunting around for the best deal on a no deposit home loan, use a reputable online broker. This will save you time and money, as well as ensuring you find the loan that suits your needs.
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