Can You Get A First Home Buyers Loan with No Deposit?

We get this question a lot. New-entry home-buyers are looking to take advantage of low-interest rates to join the new crop of homeowners. However, saving up for your first home deposit can be a huge hassle, especially if you have other financial burdens such as paying off student debt, utility bills, and other recurrent payments.

There is some good news, though. That’s right; thanks to a slew of government subsidies, First Home Owners Grant, and a broad range of family pledge options, it is now easier than ever for first-time homeowners to join the housing market, even without a deposit.

Family Pledge Loans for First Time Home Buyers

The truth is most people who get no deposit home loans are first home buyers who’ll occupy the property. Top-tier lenders and banks like first time home buyers because they tend to pay their loans on time, thus lower credit risk. Nonetheless, you will need a family pledge loan to get your first home buyers loan approved.

Family Pledge home loans offer first time home buyers an opportunity to borrow 100%-105% of the house buying price. Traditionally, only a handful of lenders accept second or subsequent home buyers.

Who is a Security Guarantor?

A guarantor is a person who cosigns your loan. The individual can be legally responsible for servicing the home loan if you fail to make the repayments. The guarantor may also have to pay any charges, fees, or interest accrued. For most first time home buyers, the parents often act as the family pledge. Speak to a broker about how the loan works.

How Do Family Pledge First Home Buyers Loans Work?

When applying for your first home loan, your guarantor will guarantee the loan using his or her property as collateral. Again, this is your parent in most cases.

The idea of a first-time home-buyers guarantor loan is to help new-entry homeowners to get into the real estate market sooner. That is, you do not have to save enough for the deposit on your home loan. You can remove the guarantee on the loan once you have gained equity in your home or the property has improved in value.

Do I Need to Show Proof of Savings?

While family pledge home loans enable home-buyers to take out 100% or more of the purchase price, some banks and lenders will require that you show that you have 5% of home value in genuine savings or you have been paying rent for a year on time