No Deposit Home Loans For First Home Buyers
Saving a 20 per cent deposit for your home loan is no mean task. According to reports, it could take over 9 years to save for a median priced home in Sydney. But, do you want to wait that long to purchase your dream home?
Rent and Save
Did you know that Australians spend nearly 30 per cent of their monthly income to pay their house rent? No wonder renters find it hard to save for a home loan deposit!
The average weekly payout in Australia is about $1,500. So, you need to save at least 15 per cent of your income each month, for 3 to 4 years, to save a minimal 5 per cent deposit for a median-priced home!
In short, if you are a renter planning to buy a home in Australia, 45 per cent of your income would go towards paying your rent and saving for a 5 per cent deposit – and that’s assuming that your rent and property prices won’t escalate in the interim.
So, what are your options then?
Low deposit, high LVR loans – If you somehow manage to save a 5 per cent deposit, you don’t necessarily have to wait to jump into the property market. By paying LMI, you can borrow up to 95 per cent of the purchase price and buy your home sooner.
LMI refers to lenders mortgage insurance and it protects the lender in case you default on your home loan. LMI can cost you anywhere between 1-3 per cent of your loan amount, depending on the lender and your LVR.
Learn more about LMI.
Rent as genuine savings – Paying your rent and saving up a deposit could be challenging. Fortunately, our brokers know of lenders who accept your rental history in lieu of genuine savings as a pre-requisite to lending money to you.
Note that you would still need a small deposit, but lenders will accept your rental history as proof of your financially responsible behaviour, which means you can use other sources of income, such as a cash gift or annual bonus, to fund your deposit.
Guarantor loans – It is possible to get a no deposit home loan if your parents agree to use the equity in their property to secure your mortgage. However, as you are using the equity in your parent’s home to secure your home loan, any default on your mortgage could lead to the loss of your family home. Note that you still need proof of genuine savings even if your parents guarantee your home loan.
No Deposit Home loans
As you can see, if you have adequate income to service a home loan, you don’t need to save a 20 per cent deposit to purchase your home. But what if you have zero deposit and no parent guarantee available? Does that mean you’re locked out of the property market forever?
Well, not anymore! HashChing brokers have access to 100% LVR Home Loans for Professionals that you can avail to purchase your dream home now!
Yes, zero deposit home loans are real, and you don’t even have to pay a low deposit fee or LMI to access one.
If you are:
- A professional with university education;
- Have been in a steady job for two years or more; and
- Earn over $150,000 per annum,
You might be eligible for a no deposit home loan with one of our lenders. Your interest rate might be higher than what you pay on a regular loan – but, on the bright side, you can get into your home sooner, without having to wait long years to save a deposit.
Looking forward to purchasing your home in 2019 but struggling to save a deposit? Speak to an expert now to own your home sooner.
By Vidhu Bajaj,
HashChing Content Writer