Have you been made redundant?
Losing your job can be tough but getting a home loan doesn’t have to be. Discover how you can your redundancy payment as a deposit.
How much can I borrow?
- Borrow up to 105% of the property value: You need a guarantor to be able to do this.
- Borrow up to 95% of the property value: Some lenders will use 100% of your redundancy payment on a case by case basis.
- You need to be currently employed.
- You’ll need to have a clear credit history and repayment history.
Have you received severance pay but need a home loan or want to refinance your mortgage?
How do I qualify?
- The severance payment needs have been in your savings account for at least 3 months.
- You will usually need to provide a Notice of Dismissal or Letter of Termination of Employment that indicates you were officially made redundant.
- Some lenders don’t require you to have genuine savings will use your redundancy payment as a deposit.
How much of your redundancy pay will banks use?
It depends on the lender but some will use 100% of your redundancy pay.
What if I was made redundant less than 3 months ago?
You need to be earning a regular income in order to qualify for a home loan. If so, we can help you find a home loan solution!
It will help your application if you have a savings buffer to help with making mortgage repayments, particularly if you currently have a mortgage and have had to take a pay cut.
What if I’m currently on probation?
With less than 3 months in your new role, you’ll have a greater chance at approval if you’re still in the same field or industry.
For example, if you were made redundant from your position as an electrician with a small business but you were able to secure work with a large subcontractor.
Of course, it’s common for people to switch industries after redundancy, especially in a turbulent sector like mining.
Generally speaking, if you’re now employed in a different field, you’ll need to complete probation before applying for a mortgage.
We work closely with lenders that can consider your mortgage application even if you have been in your job for just one day!
How much do I need to buy a property?
Usually, you require at least 5-10% of the property value as genuine savings.
Lenders consider borrowing more than 80% as a risky loan so mortgage insurance protects them in the event that you default.
You can ask your parents to act as a guarantor if you want to avoid LMI altogether.
Keep in mind that you need to be earning a regular income and meet standard borrowing power criteria to qualify for a no deposit home loan.
Discover if you qualify
Call us on 1300 889 743 or complete our free online assessment form to speak with an experienced mortgage broker about your situation.