Understanding No deposit Home Loans
A no deposit home loan is a type of mortgage where the borrower is not required to provide a deposit or down payment when purchasing a property. In traditional home loans, lenders typically require borrowers to contribute a certain percentage of the property's purchase price as a deposit.
No deposit home loans are often made possible through the use of alternative arrangements, such as guarantors, equity in another property, government schemes, personal loans, or shared-equity schemes. Here are some common options for obtaining a no deposit home loan:
Guarantor home loan
Refinancing offers an opportunity to establish a better relationship with a new lender who understands your business requirements. A supportive lender can provide swift and hassle-free ongoing financing, aligning with your business needs.
Using equity as a deposit
If you already own a property, you can use the equity you have built up as a deposit for a new home loan. This involves refinancing your existing property and using the released equity as a deposit for the new property.
First Home Loan Deposit Scheme
This is a government program that helps first home buyers purchase a property with a deposit as low as 5% without requiring them to pay Lenders Mortgage Insurance (LMI). Eligibility criteria apply.
Gifted deposit
In some cases, parents or family members can provide a gift of funds to be used as a deposit. Lenders may consider this as a valid deposit source.
Personal loan as a deposit
Refinancing offers an opportunity to establish a better relationship with a new lender who understands your business requirements. A supportive lender can provide swift and hassle-free ongoing financing, aligning with your business needs.
Shared-equity schemes:
These schemes involve an equity partner contributing a portion of the purchase price of the property in exchange for an interest in the property. Some government programs and lenders offer shared-equity arrangements.