To get a home loan, you will have to deposit a sum equal to 20% of the property's value. The average price of homes in Canberra is currently set around $700,000. That means you will have to pay a whopping sum of around $140,000 if you're to get a mortgage in the city. This is a huge sum and the average person might find it difficult to raise it. But as mortgage brokers, our job is to bring you the best mortgage solutions. There are two options for clients who can't afford the required deposit. They are the zero deposit home loans and the low deposit home loans.
Low Deposit Home Loans
If you're not ready with a full deposit right now, we will find a lender willing to provide you a loan with as little as 5% deposit. This means that instead of paying a sum of $140,000 for a $700,000 property, you will be depositing a sum of $35,000. These loans come with a form of insurance called Lenders Mortgage Insurance. And the higher the loan, the higher the cost of the insurance. Also, this option is available to home buyers only and investors will have to take up other options.
No Deposit Home Loans
This option is available for prospective borrowers who have zero savings available to pay for a deposit. In the past, some banks and lenders made it possible for borrowers to get loans with zero deposit but the process has become somewhat stricter.
Where there's a will there's a way though. One of the surest ways by which you may get a home loan is if you provide the lender with a guarantor. Your guarantor would have to sign a document stating that they would take full responsibility for the payment of your loan should you forfeit on it.
How Does a Guarantor Loan Work?
Most lenders require your guarantor to be your parents but in a situation where a parent is unavailable, a close family member may be accepted. With a guarantor, you can borrow up to 100% of the property's value. But first, your guarantor should know that a property would have to be provided as a guarantee. The portion of this property owned by your guarantor should be able to cover your loan. This property will be taken in the event that both you and your guarantor forfeit the loan.
Other Options: Where There's A Will There's A Way
Again, where there's a will there's a way. Asides from the guarantor loan, there are numerous other options we can look at.
Getting a deposit together via the First Home Loan Deposit Scheme for example. Also, an existing property can be refinanced to free up funds if you already own a property. You might also be able to borrow and make a deposit from a personal loan facility if you qualify.
Let's talk in any case. The truth is there's probably never been a better time than right now to get approved for a home loan and we're here to help!
Maybe you've had a few bumps in the road that affected your credit or your current circumstances mean you're not a good fit for the big banks. That doesn't mean you can't get a home loan. The truth is there's probably never been a better time to get real estate finance. Let's talk.
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