Has anyone used the no/low deposit home loans, preferably in north qld?? Hubby & I (&3 kids) are really struggling to save money for a house deposit and wanted to do the no or low deposit ones. Anyone have any info and experiences ??? Any tips greatly appreciated!!! Thankyou
6 Replies
Not so sure there is any lender out there that still offer this product / option. It's simply too risky for the lender and the govt have really cracked down on lending in the last few years. If you are renting you can use your rent paid as 'genuine savings' but you'll still need 5% deposit + costs to contribute. If you can get that as a gift you gave a chance, but otherwise you need to save that.
Can you use some else’s property as your deposit? If they have sufficient equity, you won’t need much as you are in north qld and affordability is much better here, that can be your deposit.
In cairns you could get a place for say 350k, 20 percent is only 70k, could even get away with ten percent, 35k. Just bare in mind, bank will cut 20 percent off the value of their home, then look at how much equity they have. Twenty percent could mean you don’t pay mortgage lenders insurance I think, even if you use a house as deposit. Any brokers on here want to confirm That?
Then look at serviceability. Talk to a broker about your income and how much you can borrow, based on that. Get rid of credit cards, they consider the amount as debt, even if you don’t owe anything on them.
I wasn’t able to use parents house as they are old and don’t have a lot of assets aside from family home and nearing retirement, the bank will look at that too. If you are young and your parents aren’t nearing retirement, you should be okay. Banks now have responsible lending provisions, which makes things a little more difficult, but still doable. First port of call, see a broker.
We were able to use my husbands as guarantor and they are both retired and on pensions. Have you spoken to a broker? They will be able to tell you all your options.
Bear in mind, using another persons property as a guarantor is a huge risk on their behalf. If you fall behind on your mortgage they will chase the guarantor! Personally not something I would want to risk.
They only guarantee 20% of the property and as long as you have stable employment and don’t borrow more than you can afford. The risk of that happening is minimal.
Sorry, I should have clarified, I got the loan myself, I just considered the option of using mum and dads to get out of LMI.
To the other commenter, yes if you default, they do come for the guarantors.
That’s why they look carefully at their situation I.e. assets aside from home, age, ability to work etc.