No Deposit Home Loans
As the name implies, a No Deposit Home Loan allows you to buy a home without the money normally required for a deposit. You may effectively secure a 100% home loan on the purchase price of a property in Australia with some lenders if you can meet specific conditions involving a guarantor for the loan. Take note that not all applicants will qualify for a No Deposit Home Loan, and you may need the guidance of a mortgage broker to know if you are eligible.
Most lenders do not typically offer No Deposit Home Loans in Sydney or Australia these days, but they do offer Low Deposit Home Loans, which requires at least a 5 per cent deposit. You may qualify for a Low Deposit Home Loan if you can demonstrate a regular and strong source of income and meet other stringent guidelines.
Whether you qualify for a No Deposit or Low Deposit Home Loan, you should take note that there are still upfront fees that you need to settle first before you can proceed in applying for a home loan. These costs involve legal fees, stamp duty, building inspections, etc.
No Deposit Home Loans may also carry higher interest rates and additional charges, and you may need to pay Lender’s Mortgage Insurance (LMI). The approval process may also take longer as the lender may also need to run credit checks on your assigned guarantor. Hence, it is a good idea to discuss this option with our mortgage broker team.
How To Qualify for a No Deposit Home Loan
Banks and lenders usually follow strict guidelines in approving No Deposit Home Loans or Low Deposit Home Loans. The typical requirements for this type of home loan may include:
- Outstanding credit rating
- Responsible repayment record
- Stable and regular source of income
- Proceeds must be used to purchase a common property type
- Acceptable location security location
- The presence of a family gurantee