General Comment

No deposit home loans

No Deposit Home Loans

Many years ago before the GFC, if you had no deposit, it was possible to borrow 100 percent of the cost of a new house. In some cases you could borrow 110 percent to cover the stamp duty and legal costs as well. This was all done using just the house being bought as security. Times have certainly changed since then. The first home owner grant was available on all homes being bought and life was generally good.

Since the GFC, lenders don’t offer such loans. However if you want to buy a home and have no deposit then there is still one option that might be available.

No Deposit Home Loans – Still available

Quite a few lenders offer a home loan for 100% of the purchase price (even 110% in some cases) and they do this by using some of the equity in a guarantors home. Usually the guarantor will be a parent, but not always. I recently helped a young couple buy their first home using a guarantee from her Aunt to provide additional security. The key is knowing what the policies of the various lenders are and how they apply to the situation that you have. Most lenders will require the guarantor to have an income that would enable them to make a repayment on part of the loan being applied for. Some lenders will just look at the equity the guarantor is offering. One lender will even allow the guarantors income to be used in the affordability calculations.

So while times have certainly changed from the pre GFC era, there is a way to make these types of loans happen and the best way to see how your situation would go is to seek professional advice from an Illawarra Mortgage Broker about the options you might have.