When it comes to saving for a home deposit, you’ll often hear people bring up a minimum figure of 20%. In other words, if the purchase price of your home is $500,000, many people will tell you that you need to. Casino liquor licence. Those additional 10,000 first home buyers will be able to obtain a loan to build a new home or purchase a newly built home with a deposit of as little as 5 per cent 3. However, in more good news, the budget. Low Deposit Home Loan. Make your dream of owning your home a reality. Get into a home of your own sooner, with a home loan deposit from as low as 2%. You can choose to buy established or build. You may even be able to use your first home owner grant towards your deposit.
Other options for first homebuyers with no deposit
If you have no deposit or very limited savings, you might be able to find resources by tapping into other sources of money.
If your family members are able and willing (and we understand this is not often the case) they could provide a cash gift to increase your deposit. However, there are rules that apply.
Alternatively, if your parents own their home and are willing to guarantee part of your deposit, they could be your guarantor. The guarantor doesn’t need to pay anything, however if their guarantee is worth more than 20% of your home’s value, you may be able to avoid paying lenders mortgage insurance, and that’s a valuable saving.
There’s also the option to use a windfall, such as an inheritance or a monetary gift from family members.
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Lenders usually like to see that you saved up for a deposit — it shows that you’re more likely to meet your loan repayments — but some may be willing to accept cash gifts as deposits under certain conditions. The lender may ask for a statutory declaration, which states that the money is being handed over to you unconditionally.
While it may be possible to buy a home using a small deposit, it can be difficult as a first homebuyer to know what choices will suit your needs. An Aussie Broker can help you weigh up your options for saving up a deposit, as well as compare rates across a wide range of options. Andi eigenmann and albie casino.
Article summary
- Homebuyers who lack the funds for a deposit have another option available to them: the 100% home loan, in other words, a home loan with no deposit required.
- Banks in South Africa are currently approving more 100% home loans, in an attempt to boost the property market.
- Although putting down a deposit has many benefits, the 100% home loan presents first-time home buyers, who may have limited resources, with a viable way into the property market.
Video summary
While there are many benefits to putting down a deposit on your home, in today’s tough economic climate it may be more realistic to take out a 100% bond, especially if you’re a first-time buyer who does not have easy access to a deposit.
Indeed, if you fall into this category of homebuyer, you’re not alone. According to Kay Geldenhuys, Head of Sales Fulfilment at South Africa’s largest home loan comparison service, ooba Home Loans: “More than 60% of all the applications received by ooba Home Loans are from buyers who have no access to a deposit”.
More 100% home loans are being approved
According to Geldenhuys, over 80% of these applicants are being approved for finance, and four out of five are successful in their bid to secure a 100% bond. The rest are required to raise a deposit, usually between five and ten percent of the purchase price.
“Contrary to the widely held belief that the chances of getting 100% financing are slim, these stats prove that, when correctly represented, buyers have a very good chance of obtaining a bond without a deposit,” she says.
How a home loan comparison service can help you get a 100% home loan
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However, Geldenhuys emphasises the importance of using a reputable home loan comparison service. “Banks are willing to approve 100% bonds if they can see that you have a clean credit history and can comfortably afford the monthly repayment instalments. A reputable home loan comparison service will ensure you are correctly represented to the financing institutions so that they view your application in a favourable light.
“It’s essential that these candidates evaluate their financial situation before applying for a bond,” she adds, noting that there are, equally, many advantages to putting down a deposit.
Home Loan Deposit Nz
100% home loan versus putting down a deposit
“By providing capital upfront in the home-buying process, you will avoid paying interest on that amount of money for the duration of your loan period, which can amount to a significant saving in the long term,” she explains, adding that “It also stands to reason that the smaller the risk for the bank, the more negotiable it will be on your interest rate”.
Home Loan Deposit
Why now is a good time to get a 100% home loan
The banks’ confidence in the South African property market has resulted in a greater willingness to lend, with ooba Home Loans reporting a 4.5% increase in their home loan approval rate since the third quarter of 2018. There has also been a 5.1% increase in the approval rate of 100% home loans, partially as a result of banks catering to the needs of first-time homebuyers, who are less likely to have money for a deposit.
To gauge the affordability of your property price, and the likely chances of obtaining bond approval, it’s advisable to get prequalified with a home loan comparison service such as ooba Home Loans, who provide prequalification as a free service prior to the start of the home-buying process.
Home Loan Deposit Calculator
“Once you have an indication of the deposit required, you’ll be better positioned to consider the best approach needed to obtain your financing,” Geldenhuys says.
Hdfc Home Loan Deposits
ooba Home Loans also offers a range of tools that can make the home-buying process a lot easier. To calculate your monthly bond repayments at different interest rates, use ooba’s bond repayment calculator. Then you can use the ooba Bond Indicator, a free, online prequalification tool, to determine your credit score and what you can realistically afford. Finally, when you’re ready, you can apply for a home loan.