The earlier you get on the property ladder, the sooner your financial goals will come to fruition. Before the Global Financial Crisis and credit crunch, it was far easier to buy your first home with little or no deposit. Since then it has become far harder, but not impossible.
No deposit home loans were mostly withdrawn in 2009, though with a guarantor you can still enter the home market even without that deposit saved up.
- Imagine spending your money on an asset that is growing in value, instead of paying out every month on rent that lines a landlord’s pocket?
- Think about being able to move into your own home and live as a ‘proper family’ instead of sharing space in the crowded house owned by your parents
How No Deposit Home Loans Work With A Guarantor
No deposit home loans with a guarantor are structured so that Lenders Mortgage Insurance is not required. This one-off premium can run to thousands of dollars, so no deposit home loans with a guarantor enable the buyer without savings to buy and save big money.
The guarantor can be anyone, and though it is often the parents that post the guarantee amount it doesn’t have to be. However, you should also realise that the no deposit home loan guarantee won’t be in place for the next 30 years. This is where working with Building Loans Australia begins to show its value.
How Expert Advice Helps You Secure Your No Deposit Loan
We’ll work with you to not only find the best lender and the best terms, but also to work out an ‘exit strategy’. This will ensure that the guarantee is in place for the shortest time possible, meaning that capital is returned in full to the guarantor as soon as possible. Usually this works out to be between 3 and 5 years – depending on market conditions, income, and type of property purchased.
One condition for the guarantor to be accepted is that their mortgage (if they have one) and their guarantee amount does not exceed 80% of their property value.
We also help our clients to avoid the pitfalls that others don’t:
- If your guarantor puts up a larger guarantee than 20% of the purchase price, their risk increases dangerously. We know which lenders work with the mortgagee and guarantor to limit this risk.
- Many brokers will blanket search for this type of loan, and this can ruin your credit score. We target our search to lenders who satisfy your requirements.
- Other debts can drag on your ability to keep up mortgage payments. We know which lenders will allow you to consolidate other debts and make your finances easier.
- Don’t take a no deposit home loan without the guarantor or yourself benefitting from income insurance: for every 1 home lost to fire, 41 are lost because of loss of income. We’ll help you source the best income insurance at the best rates.
Contact Building Loans Australia today and find out how a guarantor will help your home buying dream come true, save you money, and provide protection to you and the guarantor. There’s no need to line the pockets of a landlord with rent when all those thousands of dollars could be used to build your financial security.