No Deposit Home Loans
No Deposit Home Loans
Do you dream of owning your own home but find it challenging to save up for the large mortgage deposit required by your bank? No deposit home loans, or a low deposit home loan may be a solution that could be available to you under certain circumstances. To learn more about no deposit home loans and low deposit home loans, continue reading or simply call Oak Tree Finances on 0404 403 066 now, for professional home loan advice.
No deposit home loans, and low deposit home loans can be confusing areas to non-specialists – even if a lender is willing to offer a loan for 95% to 99% of the property price, you may still need significant savings or a deposit to cover all the associated costs – government fees and mortgage insurance can be expensive. Sometimes, government grants and discounts can cover these costs.
Let’s have a look at the key guidelines for a no deposit mortgage and a low deposit home loan.
Genuine Savings and Credit Scoring
Genuine Savings
Where low deposit home finance & borrowing is concerned, many lenders will require genuine savings and use credit scoring if you are borrowing more than 90% of the property valuation when you have a low deposit. Genuine savings imply savings of at least 5% of the property purchase price, which you can show that you have saved over a period of time (typically six or more months). For example, if you want to buy a house for $500,000, you need to show that you have saved $25,000 or more. Under some circumstances, sales of shares or other assets may be considered as genuine savings. If you already own a property, this requirement can be waived.
Credit scoring
is an automatic assessment done on a range of factors from: how long have you been in your current job, what industry do you work in or how many times have you applied for loans in the past. Credit scoring can be frustrating to prospective home buyers, you may very well meet all of a given lender’s requirements for approval but still be denied a loan if your credit score is too low.
At Oak Tree Finances, we know of lenders who do not have such strict guidelines and can help you to choose the right low deposit home loans, from the right lender, depending on your situation. Call us on 0404 403 066, e-mail loans@oaktreefinances.com.au or get in touch online to discuss your needs and circumstances today.
Mortgage Insurance & Government Costs
The two main costs, also unavoidable in low deposit finance & borrowing scenarios, are mortgage insurance and government costs such as, for example, stamp duty. For no and low deposit mortgage, mortgage insurance can reach between 2% and 4% of the purchase price, with the government fees reaching over 3%. These costs can significantly increase the amount of savings you will need. The good news is that there are lenders who will allow you to add mortgage insurance to the loan rather than using your savings or deposit money. For First Home Buyers low deposit borrowing scenarios, you may still include significant discounts to government costs.
For more information on a no deposit mortgage and help with “First Home Buyers low deposit” borrowing scenarios and possible discounts involved, call Oak Tree Finances on 0404 403 066, e-mail loans@oaktreefinances.com.au or get in touch online to discuss your needs and circumstances today.
Let’s explore a few examples of how no deposit mortgage and low deposit mortgage may work in practice. These examples are general in nature and do not take your individual circumstances into consideration. Please contact Oak Tree Finances by calling 0404 403 066, emailing loans@oaktreefinances.com.au or getting in touch online to speak to a mortgage broker Gold Coast trusts with no deposit home loans Gold Coast and nationwide throughout Australia, to discuss your specific needs and circumstances.
Home Loan No Deposit – A Practical Example
Here is a practical example of a “home loan no deposit” scenario – Matthew and Claire are buying their first home, a brand-new house in Queensland, valued at $400,000. They have no deposit saved, and are looking for a no deposit home loans Gold Coast opportunity, but they are both working and can comfortably afford the home loan repayments. As First Home Buyers who are purchasing a brand-new property in Queensland, they will additionally qualify for a $20,000 First Home Owners Grant. At Oak Tree Finances, we have chosen a lender without the requirement for genuine savings and who allows borrowers to add the mortgage insurance costs to the loan itself. In this “home loan no deposit” example, Matthew and Claire have not saved a deposit, but they do have $2,500 which they can use to cover the loan costs – with certain lenders, this can also be borrowed by the way of a personal loan if no funds are available.
In this illustration of a “home loan no deposit” scenario, mortgage insurance will also be payable, but this can be added to the loan and does not have to be paid by Matthew and Claire. While a deposit is still technically required, the First Home Owners Grant will cover this requirement. In practice, this means that Matthew and Claire can buy a property without any savings apart from the $2,500.
Call Oak Tree Finances on 0404 403 066, e-mail loans@oaktreefinances.com.au or get in touch online to discuss your needs and circumstances, to learn more about a low deposit mortgage and a no deposit mortgage and how we can help you to achieve your dreams of home ownership without a deposit, or with a low deposit amount. Speak with our mortgage brokers, many new homeowners have already trusted us with no deposit home loans Gold Coast and nationwide throughout Australia.
Low Deposit Finance Example
If, in the same example, Matthew and Claire had $20,000 in savings and applied with a lender who required mortgage insurance to be paid, the scenario would change.
Several lenders will require a minimum amount of 5% in genuine savings, same as explained in the previous example. If you do have such savings, more options will be available to you. There are good interest rates available for both no and low deposit home loan borrowing scenarios.
Ultimately however, the options available to you will depend on your particular situation and on the government grants and discounts available to you. Please contact us by calling 0404 403 066, e-mailing loans@oaktreefinances.com.au or getting in touch online, to discuss your specific needs and circumstances.
Ready to take advantage of low deposit home loans or no deposit home loans Gold Coast and Australia wide? Make an appointment or call us on 0404 403 066 to discuss your unique circumstances today.