Can you buy a house with 0 deposit home loan?

Yes, in certain situations, it is possible to purchase a home with no deposit, though this is not typical. Low-deposit home loans are far more common than no deposit options.

That said, some lenders may consider 0 deposit home loans on a case-by-case basis, as long as you meet their specific requirements. The most common way to buy a home with no deposit is by securing a guarantor home loan.

  • Guarantor home loan

A guarantor home loan is when a third party, usually a family member, uses some of their own home equity to help secure a home loan for someone else. With a guarantor, you may be able to borrow up to 100% of a property’s value. The guarantor’s equity must cover at least 20% of the property’s value. The lender then places a loan over the guarantor’s property until the guarantee is removed or expires.

If the borrower fails to make their home loan repayments, the guarantor could be held responsible for the payments. This means there is significant risk involved for the person agreeing to guarantee the loan. Once the borrower has paid off enough of the loan, or if the property’s value increases to meet the lender’s requirements, the guarantor can be released from the loan. Before proceeding with a guarantor loan, it’s highly recommended that both the borrower and the guarantor consult with a financial advisor. Despite this, if you want to get a home loan in Bella Vista, you can choose Star Homeloans.

  • Home Guarantee Scheme (HGS)

The Home Guarantee Scheme (HGS) is an Australian government program designed to help eligible homebuyers purchase a property with a deposit as low as 2-5%. Housing Australia covers the remainder of the deposit, meaning homebuyers can avoid paying for Lenders Mortgage Insurance (LMI). The HGS offers several programs for different types of buyers, including:

    • First Home Guarantee (FHBG): For eligible first-home buyers to purchase a home with a deposit as low as 5% and no LMI.
    • Regional First Home Buyer Guarantee (RFHBG): For eligible first-home buyers purchasing a property in a regional area with a deposit starting at 5% and no LMI. This is not a 0 deposit home loan, this is called low-deposit home loan.
    • Family Home Guarantee (FHG): For eligible single parents or legal guardians of at least one dependent, allowing them to buy a home with a deposit starting from 2% and no LMI.




 

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