No Deposit Home Loans in Australia

Australian No Deposit Home Loans

No deposit home loans increased in availability and popularity during 2006 to the point where both low and no deposit residential property loans became available from almost all banks and lenders in Australia.

At the beginning of 2006 there were only a few lenders providing no deposit home loan products in Australia.

During 2006 mortgage insurers joined the 100 percent home loan market launching mortgage insurance products  to cater for no deposit home loans. This launch of mortgage insurance to cover high loan to value ratio home loans enabled most banks and lenders to provide some type of low or no deposit home loan in their home loan product range.

As the end of 2008 drew to a close no deposit home loans  once again become very limited in choice and availability. Approval criteria became very specific, employment and residential history must be stable, and no credit defaults of any type were allowed.

Visit this no deposit home loan site for further information.

In October 2008 the first home owners grant increase in Australia helped many people achieve the minimum deposit but this is only available until the end of June 2009. If you are thinking of purchasing a new home as a first home buyer and have steady employment and a clean credit history contact a finance broker to organise your home loan application now before it is too late! [EDIT: As of the end of March 2009 it may already be too late for many applicants with policy tightening even further]

 Basic No Deposit Home Loan Types

• Limited guarantee is where family or friends can make some of the existing equity available in their own property to help borrowers obtain finance where no deposit is available. this is the most economical way of obtaining a home loan with no deposit, if the option is available to you. Still Available!

• Low deposit home loans could be anywhere from the point where lenders mortgage insurance become applicable. Even a no deposit home loan usually requires some available cash from borrowers. Types of low deposit home loans are usually referred to as genuine savings and non genuine savings and are typically where the available deposit is between 5% and 10% of the purchase price. Some availabilty remaining.

• Some lenders will lend up to 97% of the property value, or purchase price, (which ever is lowest) but then allow mortgage insurance to be capitalised up to 100% of the purchase price which is usually an economical option compared to 100% loans and above. This product is not available due to the current world credit situation.

• 100% no deposit home loans are typically where the entire purchase price is borrowed and any extra costs will need to be met by the borrower.
  

• 100% no deposit home loans are typically where the entire purchase price is borrowed and any extra costs will need to be met by the borrower. .This product is not available due to the current world credit situation.

• A 100% investment property loan is now available over a 50 year loan term and stamp duty can be borrowed above the actual valuation of the property to really increase property investors leverage into the property investment market!   This product is not presently available due to the current world credit situation.

• A 105% home loan is where the costs involved in purchasing a property and taking out a no deposit loan can often be included in the no deposit home loan amount.   This product is not available due to the current world credit situation.

• A 106% home loan is very similar to the 105% loan except there is an extra 1% available and the insurance fee is different to most other no deposit home loan products. This product is not available due to the current world credit situation.

 Basic Low Deposit Home Loan Types

• Low deposit home loan minimum deposit amounts are usually broken up in to genuine savings and non genuine savings.

• 5% non genuine savings is the usual minimum thresholds that need to be met for most low deposit home loans.

• Some lenders may consider a 5% non genuine savings amount even if it is borrowed as a personal loan for instance. Most lenders may require proof that the 5% is a gift and repayment is not required.

• Genuine savings must usually be demonstrated by way of savings patterns evident with bank account statements for example or in some cases rent paid.

• A  very innovative option is the Equity Finance Mortgage from Homeloans LTD. This new option could either reduce your actual loan repayments or help to purchase a more expensive home than would normally be possible.

• Another option is to extend the maximum loan term by 10 years to 40 years.  This product is not  available due to the current world credit situation.

• Another property investors option, to really increase leverage, is a 50 year no deposit investment property loan where 100% of the property valuation can be borrowed and stamp duty costs can be lent on top of this 100% loan!  This product is not available due to the current world credit situation.

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