On the up: What will higher interest rates mean for real estate investors in New Zealand and further afield?
The Land of the Long White Cloud is shaping up to raise rates and the country may well be a bellwether for the Australia...
Borrowing options are continuing to open up for first home buyers with Yellow Brick Road today launching a first home buyer-specific product that doesn’t require borrowers to demonstrate a history of savings.
The First Step home loan, unveiled by Mark Bouris, chairman of Yellow Brick Road and long-time advocate of mortgage market competition, allows first home buyers to source a home loan deposit from a range of sources, such as family gifts, inheritance or a tax return.
The new product will be welcome news for first home buyers that want to enter the market but for whatever reason don't have the consistent track record of savings now commonly required by many banks in order to qualify for a home loan.
The product also offers a loan-to-value ratio (LVR) of up to 95 per cent, which means first home buyers only need to cover a deposit of 5 per cent. On a $300,000 property, this translates to a deposit of $15,000 – not too hard a sum to pull together.
Yellow Brick Road’s new home loan comes off the back of a number of non-major lenders’ moves to increase their LVRs to 95 per cent in recent weeks.
Before the global financial crisis, a raft of lenders, including the major banks, were willing to offer borrowers up to 95 per cent – or even 100 per cent, or more – home loans.
Since the crisis lenders have reined their lending policies in, with products for savings-poor first home buyers few and far between.
Yellow Brick Road’s new product is another proof point that a growing number of lenders are reopening their doors to first home buyers and seeking ways to help them make that first step into the market.
This doesn’t mean that securing a mortgage at 95 per cent is going to be easy though. You’ll need to present a good package to your lender to highlight your case for borrowing a high value mortgage.
Mortgages are loans that are used to buy homes and other real estate where the property itself serves as collateral for the loan.
Mortgages are loans that are used to buy homes and other real estates where the property itself serves as collateral for the loan.