How To Get A Home Loan Without A Deposit


Becoming an owner of a house is a big achievement and taking a home loan to fulfill this dream is one of the best ways. But the process of getting a home loan requires a person to be well-prepared with all the hassle that comes with paperwork and making a deposit for the same. Moreover, saving money for paying off deposit is another challenge that is faced by people, but here is a way you can secure a home loan without any deposit.

Here is what you need to do as a first-time buyer?

The increasing cost of living may interfere with the amount you need to secure for the deposit and thus taking a loan is very difficult in bigger cities. Having a guarantor is a must for getting approval on a home loan. If you want a lender to grant you a 100% loan on the value of the property, it very unlikely you can secure that home loan with no deposit without a guarantor.

You may be left with only one option that is to go for the property on which you have to make a low deposit for a home loan.

Get a home loan with no deposit

Usually, the sum of money you need to pay as a deposit comes down to the lender. Lenders prefer people that are first-time buyers of property as they are expected to pay their loans on time. Getting a home loan with no deposit to be paid is to have a guarantor. Also, make sure that you have a good credit report as it is difficult to get home loans for a bad credit report.

What is a Guarantor?

A guarantor is someone who already has the property, being a guarantor, their responsibility is to pay the loan in case the person is unable to pay his/her debts. Since it is a huge risk it is not easy to find a guarantor, for that you can ask someone close to you who already possess the property. You can ask your parents to act as a guarantor and use their property as security. All you need to make sure is that the property of your guarantor exceeds the value of the property you are taking a loan for.

Benefits of guarantor loans for borrowers

Having a guarantor will help the borrower to get a home loan with no deposit or lender mortgage insurance (LMI). The investor and homeowner enjoy the lower interest rates along with the 105% loan coverage of stamp duty and other costs.

Getting a low-interest rate

When you find a lender, who offers 100% value of the property as a loan, in this situation they mostly charge higher interest rates. Having Guarantor will help you get a great deal on offer from the lender.

Benefits of guarantor loans for guarantors

Guarantor enjoys the security of responsibility for a fixed liability. They also get the right to choose how they are going to secure the guarantee. In case if a person has paid-off about 20% of the loan the guarantors no longer have to tie themselves with a home loan and can step down as guarantors.

Related Posts

5 Business loans that you must need to know

5 Business loans that you must need to know

How To Shop For The Right Type Of Car Insurance Online?

How To Shop For The Right Type Of Car Insurance Online?

Everything You Need To Know About Mortgage Loan

Everything You Need To Know About Mortgage Loan