Did you know you can still get a home with a 10% deposit?
There have been a lot of mixed messages in the media recently and many of the banks are telling people that you cannot get a home loan unless you have saved a 20% deposit; however there are a few ways that allow you to still get a home with a 10% deposit.
Get A Home With A 10% Deposit
Saving a large deposit is hard.
We all know how hard it is to save money and with property prices these days it is quite hard to save enough to make up a 20% deposit, but certainly easier to save half this amount – a 10% deposit.
Using KiwiSaver to save has become a good option and as long as you have been contributing for a minimum of 3-years you will be able to use a KiwiSaver withdrawal to help with your deposit.
It is always useful to have some bank savings too as they are easier to access for securing the house.
Low Deposit Home Loan Options
In New Zealand we have a few low deposit options for first home buyers including;
- Welcome Home Loans
- Non-Bank Home Loans
- Second Mortgages
- New Builds
Welcome Home Loans – the Government introduced this to help first home buyers. A Welcome Home Loan is a home loan where you only need a 10% deposit, but there is a set criteria for the Welcome Home Loans that you need to meet to be eligible for this option.
Non-Bank Home Loans – some of the more experienced mortgage brokers have access to a range of non-bank lenders who have low deposit home loans available.
Second Mortgages – sometimes a 2nd mortgage or personal loan might be the best option, allowing you to get into your first home on today’s prices. Generally banks will not allow a 2nd mortgage, but non-banks do on the basis that you are able to afford the repayments for both loans.
New Builds – these are exempt of the LVR rules and therefore the banks can offer low deposit home loans in many cases. Sometimes you can get away with as little as 5% deposit, but generally you would want to have a 10% deposit.
Speak To Your Mortgage Broker
Low deposit home loans are still available, but your bank is generally not the best place to go as they have too many restrictions and minimal choices.
This means they often will often decline an application.
To many banks and even some mortgage brokers sourcing a first home loan when there is less than a 20% deposit all seems too hard, but buying a first home has always been hard and you need someone who cares and knows what they are doing.
If you are looking to get a home with a 10% deposit then you are advised to speak with a mortgage broker who has options. A good mortgage broker will know how to prepare your loan application to ensure the best chance of success and they know the options available in this ever changing market.
The team at The Mortgage Supply Company have options and know how to get a home with a 10% deposit.
