No Deposit* Home Loans



No Deposit* Home Loans

• Got little or no deposit available?? ... Read on! | |

| |Loans |

|First home buyer |[pic][pic] |

|No deposit home loan |No Deposit* home loans |

|New home New loan |  |

|Refinancing |Do you want to become a home owner but have little or no deposit available?... If so then a 100% home loan or no deposit*|

|Investment property |home loan may be best for you. |

|Lodoc loans |There are 2 loan types that we will explain in this section. |

|Senior's loans |The first are 100% home loans that can be done at around standard interest rates. ie interest rates start from ~ 7.37%. |

|Past credit problems |The second are "106% loans" which can be done in some limited circumstances however interest rates are approximately 0.8%|

|Commercial loans |higher than normal 100% loans. (see bottom of this page) |

|Loans - by type |  |

| |100% Home Loans |

| |100% home loans are when the bank lends you 100% of the value of your home. In other words, if you buy a $300,000 home, |

| |the lender gives you a loan of $300,000. This may be suitable for you if you only have a small amount of deposit |

| |available and would otherwise be unable to settle the purchase with a standard 95% loan.. |

| |There are a number of lenders who now do "no deposit home loans" so choosing the right one is important as they vary |

| |quite a bit in interest rate and conditions. In reality, the name "No deposit" that the various lenders are using in |

| |their advertising is somewhat misleading because only properties up to a certain price will truly be "No deposit". |

| |Using a 100% Home Loan, whether or not you need any deposit at all is dependent on the cost of the property, whether or |

| |not you are a first home buyer, and the state or Australia that you purchase in. As a rough guide for NSW .... |

| |a $220,000 property would require $0 - $1,000 deposit |

| |a $300,000 property would require about a $2,000 - $3,000 deposit |

| |a $400,000 property would require about a $4,500 - $6,500 deposit |

| |a $500,000 property would require about a $7,000 - $10,000 deposit |

| |The reason for the varying deposit requirement is because a property purchased at any particular price will always have |

| |extra buying costs that may include conveyancing fees, loan application fee, and mortgage insurance (or equivalent) fees |

| |etc. At lower property price levels (ie up to ~$220,000), the First Home Owners Grant of $7,000 is sufficient to cover |

| |these "extra buying costs" and therefore the lenders have seized on this fact to advertise the "no deposit required" tag |

| |line. As the property price increases however, the "extra buying costs" will come to a point where they exceed the $7,000|

| |First Home Owners Grant and any property purchased above this level using a 100% loan will require at least some deposit.|

| |If a 100% home loan is the most suitable structure for you then there are a couple of other considerations... |

| |No genuine savings 100% loan |

| |This loan is ideally suited to someone who can't show any savings history whatsoever. Assuming you've got the income |

| |required, if you don't have any deposit at all, a no deposit* home loan will allow you to purchase a property up to |

| |around $220,000; and a $7,000 deposit will allow you to purchase a property up to around $500,000. |

| |If the price of property dictates that you need some deposit, then this category of loan allows that deposit to have come|

| |from any source ie your deposit could be a gift from family or friends, from an inheritance, or from other sources such |

| |as the $7000 first home owners grant. |

| |For example – if you were a First Home Buyer in NSW and wanted to purchase a $300,000 property then (as long as you have |

| |enough income to service the debt), you may only need about $2,000 of your own cash to contribute for the deposit! |

| |Genuine savings 100% loan |

| |If you are able to show that you have saved your deposit yourself (either 2.5% over 3 months or 3% over 6 months |

| |dependant on the lender we use) then you will have a wider choice of lenders who will be willing to give you a 100% home |

| |loan. |

| |This may mean you may be able to get a slightly better interest rate or may mean you could possilbly get a higher loan |

| |amount by being in a position to choose between lenders who you show good serviceability with. |

| |Rates with 100% home loans can start as low as the standard variable rate minus approximately a 0.7% discount. |

| | |

| |If you want to purchase a property where even a 100% home loan is not sufficient then this may be your final option. |

| |These loans are available up to 106% of purchase price and up to $900K maximum loan amount |

| |Some examples of people who may fit into this category might be as follows |

| |First Home Buyers with zero deposit but wanting to buy a higher priced property than would be allowed using just a 100% |

| |home loan (ie greater than $250K and up to $900K) |

| |A Non-First Home Buyer with little or no deposit who wants to purchase an owner occupied property but won't receive any |

| |stamp duty exemptions nor the First Home Owners Grant (up to 900K loan amount) |

| |A property investor who wants to put down zero deposit funds to purchase an investment property and who wants maximum |

| |possible negative gearing benefits. |

| |As you can imagine the criteria to determine if you would qualify for such a loan is stricter than normal 95% or 100% |

| |home loans. |

| |The interest rate is higher (by about 0.8%) |

| |The amount of income required to pass serviceability is higher than would be required under other "standard" type loans |

| |Repayments can only be paid on a "Principle and Interest" basis. |

| |If you believe that this type of loan is most suitable to your situation then please contact us to find details or fill |

| |in the Online Enquiry Form on our website. |

| |  |

| |*Note - although many lenders call their 100% home loan a no deposit home loan, it is only in certain circumstances that |

| |truly "no deposit" is needed. Such circumstances are where the First Home Owners Grant is sufficient to cover the buying |

| |costs (ie the sum of the various costs of purchase that are over and above the actual property price - and includes loan |

| |application fee, any stamp duties payable, your conveyancer's costs etc). As an approximation a first home buyer in NSW |

| |can only buy a property up to $220,000 if they have no deposit whatsoever. However, these loans are very useful for first|

| |home buyers with LITTLE deposit and someone with sufficient income and as low a deposit as $7000 could purchase a |

| |property up to $500,000. |

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