Low deposit first time home loans
If it feels like you’re not making headway with your savings, low deposit first time home loans can be a solution to get into a place of your own sooner
Growing savings can be like climbing a mountain – sometimes it feels like you’ll never reach the summit. But maybe you don’t have to. Having a 20% deposit means you won’t have to pay lenders mortgage insurance but it may not be essential to reach this benchmark.
Low deposit first time home loans can be a way to fast track buying a home of your own. Low deposit first time home loans let you borrow up to 95% of your home’s purchase price. To be eligible it’s likely you will need to tick plenty of boxes that give the lender confidence you are a low-risk applicant. This can include having an excellent credit record, a stable job, minimal debt and an income that lets you comfortably manage the loan repayments.
With a low deposit home
Buying a first home with a low deposit can bring some downsides. Along with the cost of lenders mortgage insurance, you’ll also face higher repayments simply because you’re borrowing more. So it can be worth looking at other options for deposit assistance.
Another source of deposit assistance is a cash gift from family members. There can be strings attached. For example, you may need to store the money in your savings account for a set period of time or provide the lender with a statutory declaration stating that the money is a genuine gift, and is not expected to be repaid.
Guarantor loan down-payment assistance
Another option that is growing in popularity is the use of guarantor loan down-payment assistance. It involves having a family member,
This can offer some important benefits. It can help you buy a home much sooner than if you wait to save a larger deposit. It can also be a real money saver as having a guarantor can help reduce the amount of LMI you pay – or let you avoid this cost altogether.
The fine print…
Guarantor loan down-payment assistance can have drawbacks, especially for the guarantor, who can be asked to pay off your home loan if you can’t keep up the repayments. This makes agreeing to act as guarantor a serious responsibility – not just a mere formality.
Nonetheless, it’s good to know that low deposit first time home loans are an option if you’re struggling to save a large deposit. For more details on what’s available for your circumstances, have a chat with your Aussie Broker – it’s cost and obligation free.
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- Chapter One : Getting started
- Chapter Two : Your dream home
- Chapter Three : Money matters
- Chapter Four : Ways to purchase
- Chapter Five : Understanding interest rates
- Chapter Six : Understanding home loans
- Chapter Seven : Lending sources
- Chapter Eight : Getting your loan
- Chapter Nine : Choosing a home
- Chapter Ten : Steps to settlement