Has anyone been approved for a home loan with little to no deposit?
My mother is happy to act as guarantor (her property is worth $550,000) and put her property up.
The house we are looking at has an asking price of $399,000. We have 2 dependants and my husband works permanat part time, guaranteed 26 hours per week but usually averages at least 32. He has worked as a casual for 2 years in the same job and just been put on permanent part time. I have just had a baby and am studying.
What are our chances of being approved? I know nothing about the process and just wanted to know other people's experiences and if we even have a chance before we talk to any banks or brokers.
10 Replies
It would be better if your mum could use the equity in her property to buy the house (if she has enough) then you pay mortgage, rates, water etc for a few years and knock down the loan and then do a family transfer.
Without a deposit, without full-time work I doubt your chances of being approved would be high sorry.
I don't see how you would be able to repay a mortgage of that size on a single part time wage. You'd be looking at repayments of close to $2000 a month and that's not including rates, water, insurances and all of your other bills and living expenses.. being a single income family, neither having fulltime work, no deposit and therefore no strong savings history I doubt you would be approved for a loan of that size. Your best bet would be to speak to a mortgage broker to see what you actually would eligible for and look for houses in that price range
So my partner works full time and I part time
We had a 20k deposit and the banks said no go save some more
We have no children or any debt either
10 years ago before things got stricter we were knocked back by the bank we've done all out banking through since we were kids.
Both in full-time work, $17k deposit + eligible for the first home builders grant ($21k back then).
In the end we saw a mortgage broker that did find us a lender.
Our mortgage repayments alone on a loan half the size of yours are over $1000 month. Can you afford it on a part time wage?
Sounds unlikely. My sister got knocked back with a deposit and a dual income because she wasn’t in full time permanent work for over 12 months. They earned more than enough it was the lack of time in permanent full time employment (she’d been working at the same place for many many years).
Can you afford $2000 per month in repayments, PLUS gas, electricity, water, rates, insurance, bills and general household stuff?
You might be suffering mortgage stress (if you pay more than 30% of income in mortgage expenses). May be speak with broker and see what they say? Or look at a regional area 🤷♀️
A guarantor used equity in their house to guarantee whatever amount you need to bridge the gap between your savings and 20% of the cost so you don't have to pay mortgage insurance. It doesn't reduce how a bank assesses what you could afford to pay though. You would need to prove you can pay a home loan for 399000, you just would potentially avoid paying 15k mortgage insurance. A loan of 399000 over 30 years would about 1700 per month assuming current interest rates of around 3%. With 3 dependant (you and 2 children) and being in part time employment I would think his income would need to be quite high for that to be approved? My home loan was 379000. Hubby and I were both on about 80k per year when that was approved 10 years ago. We were approved up to 400k at the time with a 20k deposit.
The problem isn’t no deposit, you have your mums home for that, it is serviceability I.e. your ability to pay the loan. With three dependants and a part time wage, I don’t see how. Your rental payments can be seen as savings, but honestly, I don’t think your income would be enough. How much does your husband earn?
You have an almost zero percent chance of being approved by the information you’ve shared.
A $2000ish a month mortgage
Your partner would need to be earning $50+ per hour.
You need to prove you can save a deposit, be able to service the $2000 monthly loan repayments , rates, electricity, water, insurance, along with all other bills per week. (Food/petrol/rego/necessities/schooling etc).
If you can’t save a deposit whilst renting, then you wouldn’t be able to afford living with a mortgage.
And why would you risk losing your parents house?
Do this on your own.
Read “the barefoot investor “ and get your finances in order.
I’m sorry to be blunt but you have no chance at all. Banks are very strict. You mother would be better off using the equity in her home to buy it herself and you can rent from her.
If you want to buy yourself you husband needs to find a permanent job with more hours. My husband works about 75 hours per week and combined we earn over $130k per year and we still had to have a deposit.