Give me a breakdown of all no deposit home loans available

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Sammy
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Joined: Fri Apr 12, 2019 3:40 pm

Give me a breakdown of all no deposit home loans available

Postby Sammy » Fri Apr 12, 2019 3:42 pm

Hi, we’ve been setting aside some of our wages for a deposit and have come up with $15k so far but it’s been going rather slowly. We’re currently renting in the city ($610 per week) but with a three-year-old boy and a baby girl on the way, we could use some extra space. We’re interested in purchasing a 2 bedroom house in Langwarrin, Vic which is listed on the market for $575,000. It could be a while before I’m able to come up with a 5% deposit as well as funds to complete the purchase, so I’m looking at some no deposit options.

Can you give me a breakdown of all no deposit home loans available so that I may weigh the pros and cons?

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Otto Dargan
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Re: Give me a breakdown of all no deposit home loans available

Postby Otto Dargan » Fri Apr 12, 2019 4:16 pm

Hello Sammy. Welcome to the forums.

Congratulations on the baby girl!

There are five primary no deposit home loan solutions available which are:

  • Guarantor loans: If you or your spouse’s parent can provide a guarantee secured on their property, you can borrow up to 105% of the purchase price.
  • Gifted deposit: If your parents can provide you with 5% to 15% of the purchase price as a non-refundable gift, some lenders may accept this as your deposit.
  • Personal loan as a deposit: Not many lenders accept this, however, if you have a very high income you can borrow up to 95% of the purchase price plus a personal loan. You must have a clear history and no more than $10,000 in debt.
  • Equity in another property: If you already own another property you can use the equity in that property as a deposit. If you have sufficient equity then you don’t need any savings at all.
  • Use your superannuation: If you have over $150,000 in your super, you can set up a self-managed superannuation fund (SMSF) to buy a property. You can only use this for an investment property, and not as an owner-occupied property.

We specialise in no deposit home loans.

Speak to one of our experienced mortgage brokers by calling us on 1300 889 743 or fill in our free assessment form to find out how you can qualify for a no deposit home loan.

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

Sammy
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Joined: Fri Apr 12, 2019 3:40 pm

Re: Give me a breakdown of all no deposit home loans available

Postby Sammy » Fri Apr 12, 2019 4:34 pm

So, essentially if we don’t have my parents or my in-laws help us, we would require a deposit. My in-laws are willing to gift us a portion of the deposit but I was hoping not to go this way. It seems I have no other choice. The combined amount should cover the deposit. Are there any caveats I should be aware of when using a gifted deposit?

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Otto Dargan
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Re: Give me a breakdown of all no deposit home loans available

Postby Otto Dargan » Fri Apr 12, 2019 5:58 pm

Hi Sammy,

Lenders have strict criteria regarding gifted deposits however if it’s your parent or in-laws who are gifting you the deposit (or a portion of it) they are generally accepted.

You would need to provide a signed gift letter from your in-laws stating that the amount is actually a gift and not a loan.

You can use our gift letter template for a mortgage that’s accepted by most lenders.

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

Sammy
Posts: 3
Joined: Fri Apr 12, 2019 3:40 pm

Re: Give me a breakdown of all no deposit home loans available

Postby Sammy » Fri Apr 12, 2019 6:56 pm

That almost sounds too good to be true, doesn’t it?
Can you please elaborate what are some drawbacks of a no deposit home loan? Thank you.

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Give me a breakdown of all no deposit home loans available

Postby Otto Dargan » Fri Apr 12, 2019 7:05 pm

Hi Sammy,

Consider the following points:
  • You’ll have to meet stricter lending criteria than if you were able to come up with a deposit, or at least a larger deposit.
  • Some lenders may charge you a higher interest rate, although this isn’t true with all lenders.
  • Since you’re borrowing a larger loan amount, your regular mortgage repayments will also be higher.
  • You’re not always exempt from all bank fees and may still need to set money aside to cover application fees, lender fees, legal fees and valuation fees.

Our mortgage brokers specialise in no deposit home loan solutions so, give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a no deposit home loan.

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


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