Low Deposit Loans For First Home Buyers
If you’re planning to buy your first home, you’re probably mulling over different finance options and how to procure them. Calculating interest and deposit amount, figuring out mortgage, visiting banks, checking your eligibility for government grants are all parts of the drill. However, the option that attracts most first time home buyers is Low Deposit Loans. In this article, we will discuss Low Deposit Loans for first home buyers.
Using the First Home Owner Grant as Deposit
Let’s start with the first Home Owner Grant (FHOG) by the government. You can use your FHOG for a part of your deposit. Nevertheless, you will still have to account for other upfront costs of purchasing a home, such as brokerage, legal fees and moving expenses. If you purchase a brand new house or a completely renovated one, the FHOG is normally paid on settlement. On the other hand, if you build a new house, the FHOG is typically paid when you make your first payment on the loan. Moreover, every state and territory has different requirements for FHOG, whereas some states offer FHOG only to people buying new homes. So make sure you check the requirements of your state and account for other expenses from your FHOG. You might also qualify for Keystart Finance as a first home buyer, which means you will only need a 2% deposit.
Basic Criteria for Low Deposit Home Loans
There are different low deposit loans available for first time home buyers. These have different conditions and borrowing criteria. But as a general rule of thumb, you need minimum savings of 5%-10% of the total purchase price in case of low deposit home loans.
There are other options to make securing your home loan easier. For instance, some leaders allow borrowing to the tune of 105% of the property value with a guarantor loan and 95% of the property value without a guarantor. Moreover, if you have a guarantor, you would normally not need a deposit. If your parents own their home and want to guarantee a part of your deposit, they could be your guarantor. Besides, if their guarantee is worth more than 20% of your home’s value, you may also be able to avoid paying lenders mortgage insurance. Additionally, you can also use a gift or an advance from your parents as your deposit.
How to Get a Low Deposit Loan as a First Home Buyer
If you have a small amount for deposit, it is best seeking advice from someone who’s an expert in the field. The best person for this is your local broker. They can guide you on whether or not you meet the eligibility conditions by various lenders for no deposit home loans. We, at Escape the Rent, help you by addressing all your queries and concerns on home finance. Our team of experts take pride in helping our clients at each step of the way in securing low deposit loans. Additionally, we also assist you in securing the best kind of finance for you. To explore securing low deposit loans for first home buyers, contact us here.