Loan Options For First Home Buyers (No Matter How Much Deposit You Have)

By Adelaide FHB | Blog

Nov 23

Loan Options For First Home Buyers

Transcript:

Today we wanted to talk to first time owners again about the different types of loans that are available.

When I talk about that, what are we talking about? Well the first one, and a common one for first time owners is guarantor loans. That’s where we get a family member to come in and support us. They might use the equity in an existing property that they have and then that equity is used as a potential deposit on our house. Then we sort of have to pay back the mortgage and the loan for that one as well as our own. That’s one way.

Alternatives to Parent Pledge

Sometimes people don’t want to feel comfortable asking their loved ones to support them in that capacity. Then what do we do? Well then we need to get a loan in our own right. That means we can go for a 95% lend or a 90% lend or an 80% lend if we don’t want to pay mortgage insurance because the other two once we go over 80 are going to incur mortgage insurance. Therefore what happens is we have to save up that deposit. If we’re using a 500,000 dollar house and we don’t want to pay mortgage insurance that means we need 20% savings or 100,000 dollars.

For some of us that might not take too long. If we’re a little bit older or if we’re a bit younger that could be an amount that’s going to take quite a while. We might actually look at the mortgage insurance. There’s other people who have no real savings at all but would like to actually buy their own house instead of renting. Then what we might actually do is look at what’s called a low deposit loan.

Low Deposit Home Loans

Some banks will actually lend us money without enough deposit. What we have to do there is we really need to make sure you’re earning enough. That’s the first priority. It needs to be a regular job ongoing as well as it’s paying quite well and preferably you need to be renting with a property manager as well.

I hope this gives you some insight into the different types of loans that are available for you as the potential first time buyer. If you’d like to see more or hear more go and speak to one of your trusted advisers and I’m sure they’ll be able to help you and take this further for you. Speak to you soon.