What is a low deposit loan?
Sometimes the thing stopping you from buying a home is the cost of the down payment. A down payment is often 5-20% of the purchase price. This can enable individuals that could not otherwise get into a new home to do so. This article will explain the process and the issues that might arise with a low deposit loan.
A good time to invest in Mortgage Insurance and take out a low deposit loan, is when you think property values are about to increase.
Just like a traditional mortgage, you have to qualify for a mortgage. In order to qualify, you will have to have proof of income, a low debt-to-income ratio and proof of employment. The only real difference between a traditional mortgage loan and a low deposit loan is that the individual applying for a low deposit loan does not have the cash for the down payment.
Many individuals are seeking to buy a home to avoid paying rent. While a low deposit loan does allow one to get into the property market, it will bring some extra costs. The interest rates will be higher. The borrower can also expect to have to pay mortgage insurance. This is the case because the buyer cannot meet all of the traditional qualifications for a mortgage loan.
If you want to get out of the rental market and own property, a low deposit loan is a way to do so. While you will likely incur extra costs like mortgage insurance and higher interest rates, it is a way to get into the property ownership world.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s an exciting and very rewarding one. If you’re thinking of applying for a home loan, you can Apply Online today to get started!