Can you buy a house without a deposit?

Any general questions you might have in regards to loans and finance.
Mikail
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Joined: Fri Apr 26, 2019 5:09 pm

Can you buy a house without a deposit?

Postby Mikail » Fri Apr 26, 2019 5:11 pm

Hi, I’m looking at purchasing the current studio apartment I’m renting at $480/week in Brighton. The property owner told me he’s planning on selling the property and is going to list it soon. I don’t have a lot of debt neither do I have much in savings. Is there a way I can get approved for a home loan without a deposit?

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Otto Dargan
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Re: Can you buy a house without a deposit?

Postby Otto Dargan » Fri Apr 26, 2019 6:42 pm

Hello Mikail. Welcome to the forums.

The best no deposit option for a first home buyer is a guarantor loan with which you can borrow up to 110% of the property value. You can use the equity in your parent’s home to secure your mortgage so you can buy the studio apartment with no deposit. With a guarantor, you can avoid the high cost of Lenders Mortgage Insurance (LMI) as well as qualify for low-interest rates.

The other no deposit home loan option is a gifted deposit. If your parents or close relatives can gift you a deposit, you can borrow up to 95% of the property value with no genuine savings. Lenders usually require a signed gift letter stating that the gift is, in fact, a gift and not a loan.

There are other options for a first home buyer with no deposit:
  • Personal loan as a deposit: This option is only viable for an individual with a high income, less than $10,000 in debt and a perfect credit history.
  • Use your superannuation: If you have over $150,000 in your super, you can set up a self-managed superannuation fund to buy a property. However, the property cannot be an owner-occupied property, it is only for investment purposes.

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

Mikail
Posts: 3
Joined: Fri Apr 26, 2019 5:09 pm

Re: Can you buy a house without a deposit?

Postby Mikail » Sun Apr 28, 2019 11:13 pm

I should have mentioned this in my initial question but this will be my first big purchase as such I might qualify for some first home owners benefits.
I can use that towards the deposit right?

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Otto Dargan
Mortgage Specialist
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Re: Can you buy a house without a deposit?

Postby Otto Dargan » Sun Apr 28, 2019 11:43 pm

Hi Mikail,

You may qualify for first home owners grant (FHOG) or first home owner benefits (stamp duty concessions). And yes, you can use the FHOG as part of your deposit however the grant in and of itself is usually not enough to cover the deposit.
They tend to differ from state to state so please try our FHOG calculator to discover which grants are available to you.

Please also check with State Revenue Office, Victoria to confirm the benefits available to you.

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

Mikail
Posts: 3
Joined: Fri Apr 26, 2019 5:09 pm

Re: Can you buy a house without a deposit?

Postby Mikail » Mon Apr 29, 2019 11:32 am

Great. Except for LMI, I have no idea the types of costs associated with buying your first home.
Can you provide me with a clearer picture?

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Otto Dargan
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Re: Can you buy a house without a deposit?

Postby Otto Dargan » Mon Apr 29, 2019 12:19 pm

Hi Mikail,

Sure. The costs associated with purchasing a property can be divided into two main categories: Government fees and additional costs.

The government fees include:
  • Mortgage stamp duty: A state government fee that’s calculated on the amount you borrow. Most states waived this for first home buyers and they’re phasing this fee out.
  • Purchase stamp duty: The most expensive fee associated with buying a home is the purchase stamp duty however some states offer stamp duty concessions for first home buyers.
  • Registration and transfer fee: A fee of around $200 to register the change of name on the property title and registering the new mortgage on the title.


Additional costs include:
  • Conveyancing costs: You’ll need to hire a conveyancer or solicitor to handle the transfer of the property into your name. This will cost you between $800 to $1,500 approximately.
  • Inspections/Reports: You’ll want to make sure you order a building and pest inspection and strata report. These can cost up to $600 in total.
  • Loan fees: Some lenders also charge an application fee, valuation fee or settlement fee. These fees vary from $0 to $900.
  • Lenders Mortgage Insurance (LMI): You can use our LMI calculator to get a quote.

Talk to one of our specialist mortgage brokers by giving us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a no deposit first home buyers loan.

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


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