What “no deposit no guarantor” home loans are available?

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Obi
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Joined: Tue Jul 02, 2019 6:22 pm

What “no deposit no guarantor” home loans are available?

Postby Obi » Tue Jul 02, 2019 6:23 pm

Hi, we’re looking to buy a house with my de facto partner of 3 years. We have no deposit but achieved our goals being completely debt free :) My partner’s father is willing to be the guarantor for our home loan however, I wouldn’t want to impose on him. What “no deposit no guarantor” home loans are available?

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Otto Dargan
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Re: What “no deposit no guarantor” home loans are available?

Postby Otto Dargan » Tue Jul 02, 2019 7:15 pm

Hello Obi. Welcome to the forums.

Apart from guarantor home loans, there are a few other no deposit home loans available:
  • Gifted deposit: If your parents or in-laws can gift you a deposit that is acceptable to some lenders.
  • Personal loan as a deposit: If you have a high income, clear credit history and no more than $10,000 in existing debt, you can use a personal loan as a deposit.
  • Using the equity from another property: If you have equity in an existing property, you can use that as the deposit to purchase another property.
  • Self-managed superannuation fund (SMSF): If you have over $150,000 in your super, you can set up an SMSF to buy an investment property. However, you cannot buy an owner-occupier property within your SMSF.
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 no guarantor home loan.

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

Obi
Posts: 3
Joined: Tue Jul 02, 2019 6:22 pm

Re: What “no deposit no guarantor” home loans are available?

Postby Obi » Tue Jul 02, 2019 9:11 pm

Yeah, none of these work for me. What will the timeline be if I were to ask her father to be the guarantor?
How soon can we remove him from the guarantee?

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Otto Dargan
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: What “no deposit no guarantor” home loans are available?

Postby Otto Dargan » Tue Jul 02, 2019 9:54 pm

Hi Obi,

If possible, you’d want to wait until the loan to value ratio (LVR) is below 80% of the property value before applying to remove a guarantor’s guarantee so as to avoid paying Lenders Mortgage Insurance (LMI) fees. To be clear, you can apply to remove the guarantor once the LVR reaches 90%, but that would involve paying LMI.

For example, if you were borrowing $420,000 to purchase a house worth $400,000 plus associated cost of completing the purchase, your LVR is 105%.

Once you’ve paid down the loan to $320,000 or 80% of the property value. Your LVR may in fact even be lower than this if the property value has risen in the meantime.

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

Obi
Posts: 3
Joined: Tue Jul 02, 2019 6:22 pm

Re: What “no deposit no guarantor” home loans are available?

Postby Obi » Wed Jul 03, 2019 2:25 pm

Tell me more about guarantor home loans. Your website says you can borrow 105% of the property value with a guarantor. Say we found a great house valued at $400,000 does this mean I can borrow costs such as stamp duty, loan fees, legal fees etc as well? How much equity does the guarantor need to have on the property? The entire $400,000? I don’t think my in-laws have that much equity?

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Otto Dargan
Mortgage Specialist
Posts: 7528
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: What “no deposit no guarantor” home loans are available?

Postby Otto Dargan » Wed Jul 03, 2019 2:54 pm

Hi Obi,

Yes, you can borrow 100% of the property value plus up to 5% in costs to cover stamp duty, legal fees, mortgage fees etc.

Typically, the guarantor is only guaranteeing up to 20%-25% of the property value. It is also known as a limited guarantee guarantor loan wherein the guarantor only secures part of the borrower’s mortgage instead of the whole loan amount. For example, for a $420,000 property, the limited guarantee will be around $125,000 if you’re borrowing 105% of the purchase price.

You can use our guarantor loan calculator to work out the size of the limited guarantee and whether or not you’re likely to have any issues getting approved with lenders.

One of the key advantages of a guarantor home loan is the waived Lenders Mortgage Insurance (LMI). LMI is a fee charged when borrowing over 80% of the property which is waived when applying with a guarantor.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a guarantor home loan.

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


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