Can you get a home loan without a deposit?

[danniellabella]

DH and I are thinking about our future and buying a home. We have no savings but we have about $16000 in debt which we have been paying off regularlly and paying more than the minimum repayment. Would that be enough to show that we are good customers and give us a loan? We've never ever fallen behind on any payments on anything, but we have no savings. WDYT?

[~Raven~]

I don't think the banks do those no deposit loans anymore You may find a building company that offer it though. Good luck!

[Lulu]

NOPE.

TBH, you just don't want a 100% home loan. Even if they gave them out anymore, it's not worth it.

Hack into that debt, and as soon as that is paid open your savings account and throw it all in there.

xoxoxoxo

[Amaunet]

We are buying a house/negotiating/borrowing at the moment. Its our second house but I remember some of the details from last time.

You can use the first home buyers grant as a deposit - $14K till the end of the year and then $7k. If you don't have at least 5% deposit (usually the minimum) you will prob have to pay mortgage insurance which is $$$ - over $5K - but this may be able to be added to the loan or sourced as a seperate personal loan. If its your first home you also don't have to pay stamp duty.

As for what a bank will lend you - it's based on your income and debts and factored together with you costs. Our credit union used a cost of living estimate of over $900 per fortnight living expenses with one dependant (it made no difference he's only 4 months) and then looked at what we would have left after other repayments etc.

Its worth meeting with you bank to get an idea of where you stand. I would also factor in a potential interest rate rise - we are estimating 8% in our "affordability".

Good Luck!

[danniellabella]

Thanks. I think we might at least talk to a mortgage broker to get some sort of plan. Hopefully we'll be pleasantly surprised

[LadyRaven]

They used to, we had a 100% home loan through ING and used the home owners grant to cover legal costs. It worked out well for us because it is cheaper than renting and we have our own place. We got a 3 bedroom 2 loungeroom brick house for $170,000. Plan is once I get an uber job we will flood as much as my wage as we can into the loan to pay it out as quick as we can. Till then we are just paying the minimum repayments while I work PT and study at uni.

I think the Government stopped them though, you should talk to Mortgage Choice. We went through them they did all the running around for us we just had to sign the piles of paper they put under our noses lol. They can tell you what loans are available, how much it will cost, your repayments etc etc and can give you advice on how much you need to save etc. Or you can talk to the bank you have your loan through and see what they say.

[Lulu]

and bugger - being self employed bring a whole 'nother issue...

[danniellabella]

and bugger - being self employed bring a whole 'nother issue...

Oh yeah...forgot about that with DH
Well, I earn more than him and my income is regular. Can't hurt to talk to someone though...what's the worse that can happen...they say no. Nothing ventured, nothing gained right? We have nothing to lose in finding out our options.

[Snacks]

Yup, talk to a broker. (PM me if you want the name of a really good one!)
Have you considered family equity? If either yours or DH's parents own their home and are willing to help you out, this can be a good option. If you don't have a 20% deposit, you have to pay Lenders Mortgage Insurance, which as a PP said is bloody expensive. If you do go down the family equity track, the bank will require that they receive independent legal advice and the advice is usually that you take out a life insurance or mortgage insurance policy - a bit extra for you to pay, but you can shop around, and this protects your parents and their home if something bad should happen to you and you can't pay your mortgage.
Yes, paying off your debt with no late repayments gives you a clean credit history, but that doesn't guarantee you anything.
Good luck!

[aussienic]

My SIl bought a house in 07 with a 100% loan. I personally don't like them. I think if you can save as much of a deposit as you can and even if you go with the 100% loan you will at least have some money to put down straight away kwim

[Jaycee]

Also, in SA I don't think there's no stamp duty to pay on a first home, atleast that was the case a few years ago and stamp duty can be quite expensive too. Good luck!

[danniellabella]

Snacks...it would be lovely if we could do a family equity thing...but due to family issues we've well and truely overused the mum & dad banks I think.

We'll think about it some more. We still have 9 months left on our lease so have plenty of time.

[somewoman]

There are also ways of being able to utilize you superannuation as a home deposit. Or at least there were a few years back. It's very bad practice, although I wouldn't put it as much worse than a 100% loan. Personally, I wouldn't do either, but I can appreciate why some people would...

You guys are young, so you should have heaps of time to work on building up super if this way works for you.

Worth chatting to an accountant about it.

Good luck!!