3 Sep 2010
It might be a little easier for some people to get into the property market now with home loan provider, Yellow Brick Road, offering loans that don’t come with the need to show proof of savings patterns.
The new “First Step” home loan will mean homebuyers can apply for loans as long as they have a deposit and the ability to make repayments. So potential lenders out there will no longer need to show proof that they can save by having to show months worth’s of bank statements.
The First Step home loan will allow home buyers to get approved for a home loan even if the deposit was acquired as a gift, inherited or even won at the casino.
It is believed that this type of home loan may help encourage first home owners to get back into the property market, especially if they can get their parents to help them with their deposit.
According to Mark Bouris, the initiator of Yellow Brick Road,
"First home buyers are being squeezed out of the market by the big banks, which are simply not providing adequate funding options for them. The big banks often require a borrower to show that their deposit is the result of a long term savings plan, which can make it much harder for people to buy their first home. I don't believe this is an indicator of their ability to make their mortgage payments. More important factors are their income and their credit history; not the origin of their deposit."
For those who have been having trouble getting a home loan but have the money ready for a deposit, this may be the home loan for you.