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No deposit loans remain unlikely
First time buyers continue to seek out 100 per cent home loans, despite few lenders providing this product.
According to new data from Loan Market Group, 7 per cent of the brokerage’s total enquiries during October, 2011, came from people wanting no deposit home loans.
“There remains strong interest from people who want to enter the real estate market and borrow the entire cost of the property,” Loan Market Group chief operating officer Dean Rushton said.
“But the modern day lending reality is that if you want to obtain housing finance you have to save for a deposit,” he said.
“Lending restrictions require genuine savings contributions of around 5 per cent towards the property purchase.
“A deposit of this size demonstrates to the lender that you have the capacity to save money and budget.
“It also gets you started on the front foot in terms of already having some of the market value of your property paid off.”
Mr Rushton said would-be buyers were best off to develop a savings plan early to build a home deposit.
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