No Deposit Home Loans
No Deposit loans are generally available to borrowers who have existing personal or investment properties to offer as security, but do not have sufficient ready cash to meet the full cost of a new property purchase.
Some borrowers, especially those in the first home market, require higher levels of borrowings because they have not been able to generate sufficient savings. To qualify, the borrower would need to have a strong employment record or future prospects.
These types of loans are also available to the first home buyer in some circumstances.
Some common features of these loans are:
- Lenders mortgage Insurance is required in most cases - (LMI)
- Some lenders allow the LMI to be added to the loan, thereby allowing borrowings to exceed 95%. Others will not finance this cost and require cost to be covered from the borrower s own cash resources
- A Loan Extension Fee is applied by some lenders
- Higher establishment fees can be charged in some instances
- May have some restrictions to the loan relating to additional payments or redraw
- Strong employment record or future prospects is essential
- No credit defaults
