Applying for a low deposit loan

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ReneShiftless24
Posts: 4
Joined: Tue Feb 05, 2019 6:34 pm

Applying for a low deposit loan

Postby ReneShiftless24 » Tue Feb 05, 2019 7:08 pm

Hello,

I was surfing the internet and you’re the first website that popped up. Anyway, I’m looking to purchase a house in Brisbane within the next few months. I’ve been living with my parents and think that it’s about time I find a place for myself. I’ve found one that I like a lot. It’s priced at $500,000 and I have around $20,000 saved up. I wanted to know if I was eligible for a home loan with a small deposit!

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Otto Dargan
Mortgage Specialist
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Re: Applying for a low deposit loan

Postby Otto Dargan » Tue Feb 05, 2019 7:22 pm

Hi Rene,

Welcome to the forums.

Most lenders require that you have at least a 5% deposit in genuine savings to apply for a loan. It looks like you’re just around $5,000 shy to apply for a 5% deposit home loan.

As a first time buyer, you are eligible to apply for a first home owners grant (FHOG) which might be enough to cover the deficit.

You can use our first home grant calculator to work out which government benefits such as grants and stamp duty exemptions that you may be eligible for.

With a 5% deposit, however, you are required to pay the Lenders Mortgage Insurance (LMI), which can amount to more than $14,000 if you were to have a 5% deposit on a $500,000 property.

Give us a call on 1300 889 743 or fill in our online enquiry form to find out if we can get you approved.


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

ReneShiftless24
Posts: 4
Joined: Tue Feb 05, 2019 6:34 pm

Re: Applying for a low deposit loan

Postby ReneShiftless24 » Tue Feb 05, 2019 7:38 pm

Hey,

Thanks for the information. Seems like I have quite a few things to consider before taking this forward. Can you let me know if there is any way I could avoid paying the LMI? I don’t think I can commit to paying an additional sum. Any assistance would be appreciated. Thanks.

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Otto Dargan
Mortgage Specialist
Posts: 7651
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Applying for a low deposit loan

Postby Otto Dargan » Tue Feb 05, 2019 7:54 pm

Hey Rene,


A Lenders Mortgage Insurance (LMI) premium is charged by the lender when you borrow over 80% of the purchase price.

Unfortunately, you’re required to pay LMI unless you can put down 20% of the purchase price as a deposit.

If you are looking to skip paying LMI, you can go for a guarantor home loan.

Irrespective of how much you have saved up, a guarantor loan allows you to borrow up to 110% of the property value.

You can also avoid the cost of Lenders Mortgage Insurance (LMI).


Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

ReneShiftless24
Posts: 4
Joined: Tue Feb 05, 2019 6:34 pm

Re: Applying for a low deposit loan

Postby ReneShiftless24 » Tue Feb 05, 2019 8:10 pm

Hmm! Thanks. This looks more promising. I believe that my parents would be willing to be my guarantors. I’ll ask them and get back to you soon. If I could manage a 5% deposit and apply for a home loan, would any and all banks approve the loan? I’m just trying to run all my options.

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Otto Dargan
Mortgage Specialist
Posts: 7651
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: Applying for a low deposit loan

Postby Otto Dargan » Tue Feb 05, 2019 8:46 pm

Hey Rene,

Only selected lenders approve low deposit home loan applications. Major banks don’t usually approve them.

For borrowers with a 5% deposit or less, we tend to try for a non-bank because they are:

Less restrictive in their requirements.
There tends to be little difference between their interest rates and a bank.
Sometimes we hear about a special offer that far outweighs anything a bank can offer.

Please call us on 1300 889 743 and we can tell you how we can help.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

ReneShiftless24
Posts: 4
Joined: Tue Feb 05, 2019 6:34 pm

Re: Applying for a low deposit loan

Postby ReneShiftless24 » Tue Feb 05, 2019 9:00 pm

Oh! Thanks, Otto. I appreciate all the help. I will make my decision and reach out to you before the end of the week.

Cheers


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