MY HOME LOAN TYPE GUIDE

No deposit Home Loan: This type of loan product is growing in popularity with many borrowers as it gives them opportunity of entering the property market without having the need to save for the traditional 5% to 20% deposit. This is the ideal product for borrowers wanting to escape the rent tread mill without having the necessary deposit required by traditional loan products. This loan product will advance you up to 100% of the property purchase price. There are some specialist lenders however, that will advance you up to 106% of the property purchase price as this would also include and allow for the borrowing costs and statutory costs that are normally associated when buying a property. This loan facility fills a void in the market place as most people cannot save for a deposit or find it difficult keeping pace with the rising property values in the Australian market Opting for this type of loan you are buying convenience at a premium. You will need to pay for the lenders mortgage insurance premium which is typically charged at around 3% of the property purchase price; so in essence you will still require some savings contribution going toward the purchase. These loans are also charged at a higher interest rate due to the higher borrowing risk associated with the funding. You also need to pay for the establishment and valuation costs. The main qualification criteria for this facility are to show a relatively high income with a good credit record.

Disclaimer: The above is a generic representation only. It does not constitute financial advice or mortgage structuring advice. It is only to be used as a guide only. Please discuss your financial needs with a financial planner, accountant or your banking representative. No reliance should be placed on the above information.