How Can I Buy a House With a Small Deposit?
Saving money for a deposit on a house takes consistent budgeting and building a savings account can take years that not all buyers can wait for. First-time home buyers can apply for the First Home Loan Deposit Scheme (FHLDS) or the FHLDS New Home Guarantee which are loans specified to assist first-time buyers in successfully purchasing a home. The FHLDS only requires first-time buyers to have a 5% deposit on a new home and waives the Lenders Mortgage Insurance (LMI) financial requirements.
Another way to buy a house with a small deposit is to pay for LMI. LMI protects lenders from instances of foreclosure and owners not paying their loans on schedule. A potential buyer with a small deposit has to legally pay for LMI, (https://www.helia.com.au/products/tools/lmi-fee-estimator) but this allows for more potential buyers to be approved to buy their desired homes, even with a small deposit percentage. Using our Mortgage Borrowing Calculator allows potential buyers to see how much they may be able to borrow from a lender.
Potential buyers can also ask family members to help out by gifting money to be put towards a loan or providing the buyer with an interest-free loan. Banks with 5% deposits are widely available across Australia for any potential buyer to apply for. Buyers can also pursue a guarantor, who is a family member that puts up equity from their personal property for a borrower’s loan.
Buying Houses With Small Deposits Conclusion
First-time buyers can apply for FHLDS to have a 5% deposit with LMI fees waived. LMI allows for potential buyers with smaller deposits to successfully purchase a home, and family members can also aid in this process. If you would like further assistance with small home deposits, our professionals at Mortgage House are equipped with all the necessary tools to successfully help.