What are the options for a first home buyer intending to borrow 100%?

Any general questions you might have in regards to loans and finance.
Chanda
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Joined: Wed Oct 23, 2019 6:40 pm

What are the options for a first home buyer intending to borrow 100%?

Postby Chanda » Wed Oct 23, 2019 6:42 pm

I am currently living with my parents but intend to move out soon. I have saved a bit of money (but I don’t think it’s sufficient for a deposit) and have been working for 3 years as a sales officer. Looking for options where I can borrow 90% to 100%. Found a property at $450,000.

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Otto Dargan
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Re: What are the options for a first home buyer intending to borrow 100%?

Postby Otto Dargan » Wed Oct 23, 2019 6:50 pm

Hello Chanda. Welcome to the forums.

If your parents own their property, then the best option might be to go for a guarantor home loan. Using a guarantor, you can borrow up to 105% of the property value and even cover the costs of purchasing a property.

If a guarantor is not a viable option, then there are 95% home loans available, but the servicing criteria for these types of loan are quite strict. Lenders require a minimum deposit of at least 5% of the property value. You might even be eligible for a First Home Owners Grant (FHOG) which can be a part of your deposit. You can even opt for a gifted deposit from your parents as well.

We have a lender on our panel that allows you to borrow 100% without having a guarantor and needing to pay LMI if you’re an eligible industry professional, however, the interest rates are higher and the lending criteria are more strict.

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

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

Chanda
Posts: 3
Joined: Wed Oct 23, 2019 6:40 pm

Re: What are the options for a first home buyer intending to borrow 100%?

Postby Chanda » Wed Oct 23, 2019 6:58 pm

I don’t qualify for the 100% no guarantor and no LMI home loan as my industry/profession is not listed. Guarantor options sound good right now, but my parents are also still paying off their mortgage on their home. Would this cause an issue?

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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 are the options for a first home buyer intending to borrow 100%?

Postby Otto Dargan » Wed Oct 23, 2019 7:07 pm

Hi Chanda,

It should not be an issue if your parents have sufficient equity in their property.

The lender will assess both your parents’ current home loan and how much limited guarantee they’ll be taking on for your home loan.

For example, if your parents have $100,000 owing on their home loan and they’re providing you a guarantee of $100,000, then their total debt secured on their property is $200,000.

Therefore, their home must be valued at $267,000 and above in order for the guarantor loan to be approved.

You can also use our guarantor loan calculator for more details.

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

Chanda
Posts: 3
Joined: Wed Oct 23, 2019 6:40 pm

Re: What are the options for a first home buyer intending to borrow 100%?

Postby Chanda » Fri Oct 25, 2019 11:04 am

How long will the guarantors stay on the mortgage? Will it be until the life of the loan?

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Otto Dargan
Mortgage Specialist
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Location: Sydney, Australia
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Re: What are the options for a first home buyer intending to borrow 100%?

Postby Otto Dargan » Fri Oct 25, 2019 11:20 am

Hi Chanda,

A guarantor can be removed from your home loan once your loan to value ratio reaches 80%. You will need to get a loan guarantor release from the lender, if not the guarantor will stay for the life of your loan.

Once the guarantor is removed, you can refinance your home loan and you can:
  • Save thousands by not having to pay Lenders Mortgage Insurance (LMI).
  • You can qualify for lower interest rates.
  • It’s a hassle-free process with less paperwork.
Therefore, it’s good to remove a guarantor once your LVR is at 80% and below.

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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