No Deposit Home Loans

By First Home Australia In News No comments

It may have been a case a few years ago, that a 100% “NO” deposit home loan was available, but things change and it is no longer possible for these to be found easily without good proof of savings.

Although, if a person is creative enough, they may be able to find themselves eligible for a 100% home loan, but this would be subject to availability.

Here there are some tips of how you could achieve it:

105% Guarantor Home Loans

  • With these, you can borrow 105% of the purchase price.
  • It is not required for you to have savings.
  • Your parents must provide the lender a guarantee which is secured against their property.
  • This is currently the best and easiest way to purchase a property without a deposit!

A Gift

  • Some lenders will consider your loan application even if you have not saved the deposit yourself.
  • Is it possible for your parents to find 5% to 15% of the purchase price?
  • Around 60% of first-time buyers have assistance from parents.

Use a Personal Loan as Deposit

  • Is your deposit small, in the range of 3% to 5%?
  • Are you in a career which has a high income?
  • It is possible for you to borrow 95% of the purchase price, plus taking on a personal loan.
  • It is not possible for you to have over $10,000 outstanding debt.
  • Your credit history must be clear.

Equity in Other Property

  • Are you already an owner of another property?
  • Any existing equity can be used towards your deposit.
  • If your equity is large enough, it is not required for you to have savings.

Using Superannuation

  • Are you in possession of over $150,000 in superannuation?
  • It is possible for you to set up a self-managed superannuation fund which you can use to help purchase a property?
  • This property must be for investment purposes and not for living in.
  • You are eligible to borrow 80% of the purchase price.
  • Your superannuation covers the cost of your deposit, so no savings are required.

With all the options, available, it is still advisable to have professional advice, even with option number one which is the best way, because this puts an element of risk against your parents and not just you and your home.

It may be tempting to look at any of the options above, but the risks should be considered before jumping into a commitment that is difficult to get out of. Always seek financial advice from a reputable advisor.