Can we get a loan with Minimal deposit

Any general questions you might have in regards to loans and finance.
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Posts: 7
Joined: Tue Jan 24, 2012 11:44 am

Can we get a loan with Minimal deposit

Post by Booey00 »


Im a long time follower, looking for some advice.

My wife and I are looking at purchasing my first home and her second.

Combined income is 180k per year
Car loan of 36k
personal loan of 16k
No other debt

Both very stable employment, currently renting at $450 per week, same place for 3 years.

Unable to have a Guarantor

We have 10k in savings and could borrow another 15k as a "gift"

Looking at purchasing something under 500k

What else do we need to do to get into the market?

Thanks for all your help.

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia

Re: Can we get a loan with Minimal deposit

Post by Otto Dargan »

Hi Booey00,

From the details you’ve provided, you’re borrowing power (serviceability) works out fine. To get an accurate estimate of your borrowing power we’ll need to do a full assessment.

If you can get the $15,000 as a gift plus your own savings of $10,000, that would get your deposit to the minimum required of 5% of the property value, if purchasing a property under $500,000.

There are several things you can do to improve your chances of getting approved:
  • You have a large amount of unsecured debts. If this is more than 5% of the purchase price then this may lower your credit score and this, in turn, will limit your lender options.
  • Save up a bigger deposit. While 5% is the minimum required deposit you’d still need to account for Lenders Mortgage Insurance (LMI) fees as well as property purchasing costs such as stamp duty, conveyancing fees, loan establishment fees etc. Some of our lenders allow you to borrow 95% plus LMI (97% in essence) but the lending criteria are stricter.
  • Reduce your credit card limit. Credit cards are assessed at the full limit instead of the balance for borrowing power calculations. So, reducing your limit will make your application stronger.
The good news is some of our lenders will use your rental history in lieu of genuine savings. That means a gifted deposit will be acceptable as genuine savings. Since you’ll be borrowing more than 80% of the property value, you’ll need to pass the mortgage insurer’s genuine savings policy and credit scoring. This is where most people get declined.

This is general advice as we do not have your details at hand. Our brokers can give you a complete breakdown of your borrowing power, living expenses assessment, lender options, rates and help you find a property once you’re pre-approved. For that first, we’ll need to do a full assessment, so please give us a call on 1300 889 743 or fill in our online assessment form to find out if you qualify.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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