Silo5

  • 95% Home Loan with 20k Credit Card for Costs
  • 95% LVR capitalise Stamp Duty
  • 5% Genuine Savings Home Loan
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5% Genuine Savings Home Loan

 

Is a 5% Genuine Savings Home Loan Right for Me?

 

Do you have a 5% deposit saved up in genuine savings? You might be eligible for a 5% genuine savings home loan. In this circumstance, the issue for a lot of buyers is that they have the deposit, but they don’t have enough savings to cover the extra costs associated with buying a property. There are a number of options available to you if you find yourself in this situation.

 

Options available

 

If you’ve saved hard and you have the minimum deposit for a 5% genuine savings home loan, there are a number of things you can do to raise the extra cash to cover costs like legal fees, stamp duty and conveyancing:

 

  • No genuine savings for purchase costs. Remember there is no need to source your purchase costs from genuine savings. As long as you have the 5% deposit saved in genuine savings, you can cover your purchase costs from gifts, tax returns, asset sales, or even a small personal loan.
  • Credit card add-on. You can take out a 95% home loan with a 20K credit card added on to cover the purchase costs. The credit card loan is generally subject to the same interest rate as your home loan, and you need to make two periodic repayments: one for the home loan and the other for the credit card.
  • Guarantor. You can have a guarantor such as a parent or sibling; secure your loan, rather than having a deposit. This enables you to redirect your deposit savings to cover the purchase costs. You will not need to pay for mortgage insurance either, as you have a guarantor.
  • Larger loan. You can take out a slightly larger loan and have the lender provide you with extra funds to cover the costs at settlement.

 

Are you eligible for 5% genuine savings home loan?

 

You will usually need to fulfil the eligibility criteria for this type of loan:

 

  • You need to have the full deposit amount in a separate savings account (or other approved source such as a term deposit) for a three-month period without a reduction in the value.
  • You will usually need to have a solid employment history with at least one year in your current job, or at least two years in your current line of work. Employment requirements can vary depending on the lender, and the loan product.
  • A clean credit history is also important, with no defaults on your record, or all previous defaults repaid in full.
  • If you decide on a guarantor loan in order to redirect your saved deposit to cover purchase costs, you need to have an eligible guarantor who has sufficient equity in a property to cover at least 20% of the price of your property.
  • As with any loan, you need to make sure that you can demonstrate your ability to make the repayments.

 

What should you do if you want to apply?

 

If you have 5% in genuine savings for a home loan, contact ABC Mortgages today for a chat. The process might seem confusing, but our team can guide you through the process and help you identify which options and loan is best for you.