Like many people living metropolises around the world the idea of buying a home can be off putting. Well, not the home itself but the 20% deposit that comes along with purchasing in places like Melbourne & Sydney (although, house prices have dropped for their third consecutive quarter).
Nonetheless, how long would it take you to save $50,000, $100,000 or more in liquid cash? Research shows that on average it would take 12 or more years for an individual to save enough for a home deposit depending on their circumstances.
And with that we are reminded that every person’s circumstances are different, similar to the house they want, similar to the loan they take on, or the LVR (Loan To Value Ratio) they come by.
Note: As the name suggests LVR is defined simply as the amount of cash on hand one has in relation to the size of their desired loan. Generally, speaking having an LVR of 80%+ is considered good, and usually enough to get lenders to approve your loan without forcing you to pay the 1-3% mortgage insurance fee.
We can break it down as follows:
Rebecca wants to buy their first home. It is appraised at $300,000
assuming Rebecca has no savings. Let’s assume they need to borrow $180,000 for their loan.
$180,000 / $300,000 = 60%. This means their LVR is 60%
Lender Y is now required to put up the remaining $120,000 to secure the loan (also known as a haircut).
Typically, the less the lender needs to put up the better for Rebecca.
That brings us to…
What Options Are Available For People Who Can’t Afford a Large Deposit on Their Home?
Frankly until today, the options available haven’t been all that enticing. They include:
- Assuming you have a 5% deposit available one could opt to use a high LVR lender. Though, as mentioned above this would typically lead to the buyer needing to pay a mortgage insurance fee, as a way for the lender to insure themselves.
- Putting up someone else’s property up as collateral, or guarantee. This is typically associated with high legal fees, and risk for all parties involved.
No Deposit Home Loans in Australia
Requirements for Eligibility
You know we couldn’t announce such an amazing opportunity to borrowers without putting in some eligibility requirements. See below:
- Must be an Australian citizen with clear credit.
- Must be tertiary educated.
- Yearly income must be $150,000+ ($200,000 p.a when combined)
- 3+ years of placement within the professional industry.
- Properties must be owner occupied.
- Loan amount cannot exceed $1million.
Now, with the conditions out of the way. We are proud to announce that through a great partnership, HashChing is able to connect people looking to buy their first home with a no deposit home loan.
Mortgage repayments can be made weekly, fortnightly or monthly – and extra repayments are allowed. There are no annual fees, no LMI OR deposit fees and the application fee is only $3,500 and includes property valuation. If you believe you qualify then there is no need to delay buying your new owner-occupied home.