Break Free Home Loans are a leading broker of no deposit home loans in Melbourne, with over 20 years of industry experience. We provide lending solutions and advice tailored to your needs.
We work closely with clients as trusted advisors and are accessible to clients when needed. Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges.
Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Self-employed and having trouble proving your income? Maybe you’re a contractor or casual worker? Whatever your situation, we offer solutions for all types of clients’ income sources.
What Is A No Deposit Home Loan?
No deposit home loans, also known as zero deposit home loans, are a type of mortgage that doesn’t require a deposit. This means that you can borrow the full amount of the property purchase price without having to save for a deposit first. No deposit home loans are available to both first home buyers and investors in Melbourne.
Are No Deposit Home Loans Really “No Deposit”?
The long and short of it is that very few lenders truly offer no deposit home loans. Most will require a deposit in some form, whether that’s a genuine savings account, a guarantor or using equity in another property. At Break Free Home Loans, we work with a range of lenders who offer low deposit home loans and can help you to find the right loan for your situation.
A guarantor is generally the only way to get a true no deposit home loan. So if you’re looking for a no deposit home loans no guarantor, you may find it very difficult to find.
How To Get No Deposit Home Loans
There is a range of ways you can secure a no deposit home loan. These include using equity in your current home or investment property, having a guarantor, using your superannuation as your deposit and more.
If you’re not sure whether a no deposit home loan is right for you, discuss your needs with an experienced Break Free Home Loans broker today. We can help you evaluate your options and make sure you’re getting the best loan option for your situation.
First Home Buyer Grant
If you don’t have a deposit, you may be able to use the First Home Buyer Grant as your deposit. This can look like a no deposit home loan because you’re not using your own savings for a deposit.
The First Home Buyer Grant is only available for certain types of properties and in certain situations. Even more so if you’re looking to get a home loan with no deposit. If you’re interested in this option, make sure to speak with us first.
You may be able to use a personal loan as a deposit for your home loan. This can act as a no deposit home loan in some cases. However, there are a few things to keep in mind before going down this route, such as the fact that you will need to have no bad credit, and that you may have to pay a higher interest rate as a result.
A guarantor can help you secure a no deposit home loan. This is someone who provides the security for your home loan. Most people choose a family member or close friend as a guarantor. Keep in mind that this is a big responsibility, and one that should not be taken on lightly.
With a guarantor home loan, a guarantor will put up their property as security so you can borrow with no deposit. You are able to borrow 105% of the purchase price this way, without the need for savings.
In some circumstances, you can use your superannuation as a deposit for your home loan. This is usually only possible if you have a self-managed super fund, and you will need to speak to your financial advisor to see if this is an option for you.
The difference between your property’s market value and the balance of your mortgage is known as home equity. You may be able to use this equity as the deposit for your next home loan. This option can be quite complex, so it’s best to speak to a mortgage broker or financial advisor to see if this is possible for you.
Use A Gift As Deposit
Things Taken Into Account When Assessing Your Application
When you apply for a no deposit home loan, the lender will assess your application based on a number of different factors. These usually have to do with your personal and financial circumstances, but can also have to do with the type of property you’re looking to purchase and other factors.
Credit And Repayment Histories
Lenders will take into account your credit score and your history of loan repayments to determine whether or not you’re eligible for this type of loan. It’s important to make sure that you have a good credit score and history before applying for any.
Standard Type Of Property
Stable Employment And Income
There are a wide range of other factors that may be considered when applying for a no deposit home loan. A mortgage broker can help you navigate the application process and give you the best chance of securing a loan.
If you’re looking for a no deposit home loan in Melbourne, contact your local mortgage broker today.
How Much Can You Borrow Buying A House With No Deposit
Most 0 deposit home loans allow you to borrow up to 95% of the purchase price of a property, which means you only need to save a 5% deposit. While they’re called no deposit home loans, they’re more comparable to a low deposit loan. The difference is that the deposit for the loan comes from other sources than your savings.
The amount you can borrow will vary from 80% to 97% of the property amount, and this will change from lender to lender.
How To Choose A Lender For Your Zero Deposit Home Loans
Choosing the right lender is very important when securing a home loan. This is because each lender has different interest rates, products and eligibility criteria. It’s important to compare different home loans to make sure you find the best deal for your needs.
The right lender will have your best interests in mind alongside their own interests. They will help you through the entire loan process and ensure that you’re getting good terms.
To ensure you’re getting the best home loan, your best option is to work with a mortgage broker. With their experience, they will be able to find the right cheapest home loan for you from their panel of lenders.
Rates And Fees For No Deposit Home Loans
When it comes to No Deposit Home Loans, the interest rates and fees are higher than with a standard loan. This is because the risks are higher for the lender. There may also be additional fees involved due to the risk and circumstances of the loan.
Lenders charge a rate premium on loans with higher loan-to-value ratios (LVRs). The loan-to-value ratio is a measure of your risk as a borrower used by lenders. A higher LVR indicates that the property requires a larger deposit or previous equity. For example, if you were purchasing with a 10% deposit you’d be borrowing 90% of the property’s value. Therefore, your LVR would be 90%.
Most lenders for these types of loans will change the interest rate you’re paying depending on your LVR. So with a no deposit home loan you can usually expect higher interest rates.
There are also the establishment and ongoing fees which can be charged on loans with a low or no deposit. These fees may include:
Upfront mortgage fees: This is a one-off fee charged by the lender for processing your loan application.
Ongoing fees: Some lenders will charge an ongoing fee as part of your home loan repayments.
Other fees you may encounter include stamp duty, legal fees and conveyancing costs.
Lenders Mortgage Insurance
Lenders Mortgage Insurance, or LMI, is insurance that protects the lender in the event that you default on your loan.
It’s usually required by private lenders when you’re borrowing more than 80% of a property’s value. So if you’re taking out a no deposit home loan, it’s likely you’ll have to pay LMI.
The cost of LMI depends on the size of your loan and the deposit you have. The premium is paid as a one-off lump sum when you settle your loan.
Calculate Your Payments
Want to get an idea of what your loan repayments or interest rates will be with a no deposit home loan in Melbourne? Try our Home Loan Calculators. You’ll be able to get more information about how much you can afford to borrow, as well as other important factors such as your loan term and interest rate.
Got More Questions?
If you’re a first home buyer in Melbourne, No Deposit Home Loans could be the key to getting into the property market sooner. Talk to a mortgage broking expert from Break Free Home Private Loans in Melbourne today. We’ll connect you with the perfect home loans with no deposit for your situation.
Frequently Asked Questions
What Is A No Deposit Home Loan?
How To Choose A Lender For No Deposit Home Loans?
Choosing a lender for a no deposit home loan is an important decision. You want to make sure you choose a lender that is reputable and has a good track record. You also want to make sure you compare interest rates and fees before you make your decision.
An experienced mortgage broker will be able to compare many lenders to find you the best option.
Why Choose A No Deposit Home Loan?
There are many reasons to choose a no deposit home loan. Perhaps you are a first home buyer and don’t have the savings for a traditional home loan deposit. Or maybe you are looking to invest in property and want to minimise your upfront costs. Whatever your reason, a no deposit home loan can help you secure the funds you need to buy a home that would otherwise be out of your reach.
Will I Get Approved for a Home Loan With No Deposit?
Getting home loans without a deposit can be difficult. Getting approved for one will depend on the lender and your personal and financial circumstances. No deposit home loans are typically available to first home buyers, or those with limited savings. Some lenders will require you to have a guarantor in order to approve your loan, while others may ask for a larger deposit (up to 10%) if you’re considered a higher risk borrower.
For no deposit home loans VIC, Our mortgage brokers will be able to assess your situation and match you with a loan that meets your needs.