I guess you have heard of a 'no deposit home loan?' If you
Told me, a couple of years ago, that you could get money
For a loan with nothing but a guarantee of solid future
Earnings, I would have thought you were completely insane.
However, nowdays this is a common occurrence. While the
Major banks quit to take risks like that, many newer
And more adventurous lenders are taking this chance. Thus,
Many new homeowners with no deposit loans are really happy
Typically, the kind of people who will benefit from this type
Of loan are those with high incomes in careers with good
Job security. The idea behind such a loan is that the
Costs of renting are less than the benefits of owning the
Home now and going into debt. However, this is not always
The way it's done. Sometimes, because of the high risk to
The lender, there will be a premium interest rate of about
2% or even more than the current market rate.
Now, it might be a good idea to consider all of this. You
May want to find your old mortgage calculator and look at
The long-term finances, or talk with a financial consultant
And see if this might be a good idea for you. For lots of
People, this is a great way to go.
As most of us know, nothing in life is free, and you will
Have to pay some initial expenses like for example stamp
Duty, mortgage insurance and loan fees. If you are lucky
Enough to get a first-time buyers' government grant, you
Can get around paying these expenses too.
An important thing to keep in mind is that you must show
That your income will be increasing over the term of the
Loan, whether it's a va loan or another offline or online
Loan. If your income will be increasing over the course of
The loan, you can put that income back into it and build
The state of the market has an influence on the
Availability of these loans. For example, in Australia,
These no-deposit loans are getting rare because of the
Market. Lenders are choosier and stricter with their loan
Policies, and may raise interest rates, putting those with
No-deposit loans in greater risk. You should also check
And make sure the lender does not have exit fees that are
Too harsh. You have to really search the fine print.
Lenders will often offer no-deposit loans on only certain
Types of properties, or properties in certain areas,
Depending on risk or resale value.
Below are a few things you can do when considering your
– Work out a budget for the next few years. Allow for a
Possible rise in interest rates. Doing it This way, you
Will not be caught unawares.
– Make sure that you have all your other debts are under
Control before you commit to another. This is of huge
– Whenever you are able to it, pay some extra on your
Loans. Doing so will safeguard you against falling prices
And rising interest rates.