With our small deposit, what options do we have?

Any general questions you might have in regards to loans and finance.
Kira
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Joined: Tue Oct 15, 2019 6:36 pm

With our small deposit, what options do we have?

Postby Kira » Tue Oct 15, 2019 6:38 pm

My husband and have been renting for the last 4 years and paying $500 fortnightly, and the landlord has just offered us to buy the home at $200,000. We just have $6,000 saved between us and this is the first time we’re buying a home. We had never thought of buying a home. With our small deposit, what options do we have?

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Otto Dargan
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Re: With our small deposit, what options do we have?

Postby Otto Dargan » Tue Oct 15, 2019 6:53 pm

Hello Kira. Welcome to the forums.

There are many options available to get a home loan despite not having a large saving. However, a minimum of 5% of the property price is required as genuine savings. In your case, you will have to show a savings of at least $10,000.

There are also some lenders who will take your rent as genuine savings, but you will still need to show a deposit.

This savings can come in the form of gifted deposits from your parents and some banks even allow personal loans as genuine savings.

The most common option that people with little to no savings undertake when getting a home loan is taking on a guarantor loan. With a guarantor loan, you can borrow up to 105% of the property value.

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

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

Kira
Posts: 3
Joined: Tue Oct 15, 2019 6:36 pm

Re: With our small deposit, what options do we have?

Postby Kira » Tue Oct 15, 2019 7:27 pm

Thanks for the information. Unfortunately, we don’t have the option of a guarantor loan. But the rent as a genuine savings sounds like a good option. Going through the page, it says I can borrow up to 97% of the purchase price inclusive of Lenders Mortgage Insurance (LMI). Is this true?

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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: With our small deposit, what options do we have?

Postby Otto Dargan » Tue Oct 15, 2019 7:44 pm

Hi Kira,

Yes, we have lenders on our panel who will allow you to borrow up to 97% of the property value inclusive of LMI. LMI has to be paid for any loans with a loan to value ratio of above 80%.

However, to qualify for 97% home loan, stricter lending criteria applies like having sufficient income, strong employment history, clean credit history, little to no debt, sufficient asset position and there are postcode restrictions on your property.

To qualify your rent as genuine savings, you will need to how a rental ledger from a licensed real estate agent that you’ve been making timely and full rental payments for the past 12 months.

You can find a template of a rental reference letter. The letter is proof to lenders of your ability to save money.

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

Kira
Posts: 3
Joined: Tue Oct 15, 2019 6:36 pm

Re: With our small deposit, what options do we have?

Postby Kira » Tue Oct 15, 2019 7:58 pm

One last question. Since my husband and I have separate banks, do we have to get the same account to show savings, so is it ok to keep saving in separate accounts?

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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: With our small deposit, what options do we have?

Postby Otto Dargan » Tue Oct 15, 2019 8:19 pm

Hi Kira,

No, it is not necessary to get the same bank account. As long as you can prove to the banks or lenders that there are regular deposits made to both of your accounts, it should not be an issue.

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

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


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