Buy a Property with a Low Deposit

LOW DEPOSIT

LOW DEPOSIT:

Buy a property with a Low Deposit
(5-10% deposit).

It is no longer possible to borrow the 100% of the purchase price from the banks.

However, it is possible to purchase a property with no deposit only in specific circumstances:

  • Equity available in another property
  • Guarantor (equity available in guarantor property)
 It is possible to get away with a low deposit in some circumstances:
  • Gift
  • Pay LMI (Lenders Mortgage Insurance which is one off cost capitalised in the Home Loan)
However, if you want to borrow more than the 90%, most of the lenders will require to verify 5% genuine savings.
 
Most of the banks will usually lend the 80% of the market value of the property, up to a maximum of the 90% – 95% if the customer is willing pay LMI. However, in some cases (depending on property valuation, post code, visa status, or other) the bank might decide to lend you less or apply LMI above a value lower than the 80% (above 60%, 70%, or other). This is because some higher risk might be identified in relation to your property. Nevertheless, another lender policy might not consider your property as risky and usual conditions might apply.

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