No Deposit Home Loans

[bluelabel]

Seems like the lenders (or at least some of them) have learnt their lesson on no deposit home loans and will retract them from the market early next year. Read the story here: http://www.news.com.au/heraldsun/story/0,21985,24678015-662,00.html

For me this is a great thing, however, this practice should probably not have been allowed in the first place and probably should be made illegal (if not illegal, very heavily regulated or controlled) :2twocents:

The no deposit home loan has been a big player in the current crisis stemming from the United States and I feel rouge lenders that took advantage of a lot of people, who in reality could not afford loans, during the last few years to make a buck need to be held accountable.

This lending practice, IMO, has also led to the current inflated prices within the real estate market we see now.

Glad to see it go.:thumbs:

:bier:

blue

[2BAD4U]

For me this is a great thing, however, this practice should probably not have been allowed in the first place and probably should be made illegal (if not illegal, very heavily regulated or controlled) :2twocents:

Couldn't agree more. I personally would like to see a return to people having to show a savings history (as opposed to actually having the money), steady job / income and no more 100%+ loans. For me 95% should be the maximum.

I still don't believe that housing affordability is any worse now than it was 20 years ago. I think it's more a case of people setting their standards too high for a first home and low doc loans give them the ability to over extend themselves (not just first home buyers either).

:iagree: Look, we have nice smileys now.

[Wildkactus]

Couldn't agree more. I personally would like to see a return to people having to show a savings history (as opposed to actually having the money), steady job / income and no more 100%+ loans. For me 95% should be the maximum.

agree here, but I think an LVR of 80 is better, this gives both the lender and the buyer a good buffer.

[2BAD4U]

agree here, but I think an LVR of 80 is better, this gives both the lender and the buyer a good buffer.

Problem with this is it makes it tough for first home buyers. Cheapest you can buy in Perth is about $300k that means a deposit of $60k + fees, which I doubt too many first home buyers could have.

The only other way would be to relax the rules on how the deposit is obtained. For example most people would have a car loan or similar so instead of a car, allow a loan as part of the deposit. Also allow gifting of the deposit. And change entitlement to first home buyers grant so it applies to individuals not couples so that if someone has already owned a house but their partner hasn't then they still should get half the grant.

As I posted above, this should all be based on a proven savings record.

[Wildkactus]

Problem with this is it makes it tough for first home buyers. Cheapest you can buy in Perth is about $300k that means a deposit of $60k + fees, which I doubt too many first home buyers could have.

The only other way would be to relax the rules on how the deposit is obtained. For example most people would have a car loan or similar so instead of a car, allow a loan as part of the deposit. Also allow gifting of the deposit. And change entitlement to first home buyers grant so it applies to individuals not couples so that if someone has already owned a house but their partner hasn't then they still should get half the grant.

As I posted above, this should all be based on a proven savings record.

I think these ideas have merit.

For me working out the LVR is normally based on any improvments that can be obtained form the property with in the first 3 months, not just based on the deposit.

so you could go into a property with a deposit of 5% or 10% then do a reno, sub divide, etc, have the property revalued by the bank to get the other % equity, this can be done you just need to talk to your provider and I have only ever been able to do this with the big four. and I Have never done it for my own home just investment properties.

I know once again it maybe hard for the first time home owner but I do believe you need an LVR of at least 80 to be in the best position with your home.

If I was starting now I would be looking for a great little investment Apartment, Unit, Townhouse, get the First home buyer money, move in do reno's over the first year revalue as you go, then move on up, do this for a few years then you would be able to get the property you want, the problem here is most people today want this last property first.

As for the FHBG I think it should also include the First time investor,(new properties only) as this will also add to the demend for new dewelings, which will help in the current times.

[jemstoky]

The main point is that type of loan to really win you are betting that your salary will be increased steadily over time as lenders are not lending loan.Many for certain types of goods, leaving only riskier properties in the regions and places with no resale value established.

[Caroline Edson]

agree here, but I think an LVR of 80 is better, this gives both the lender and the buyer a good buffer.

Getting rid of 100% is the best thing the banking industry can do for anyone. 95% is as high as it should ever go.

I specialise in selling my homes through rent to own or Vendor Finance & as we have to be finance approved to do this I follow very strict guidelines for the people who go into my homes.

They must be full-time employed & have the income to support this offer. Obviously we have other guidlines we have to adhere to under COSL (http://www.cosl.com.au/)& ASIC (http://www.asic.gov.au/asic/asic.nsf). It is fantastic to see now that more banks will be held accountable for what can be considered irresponsible lending (http://www.news.com.au/money/banking/banks-too-lax-on-consumer-credit-according-to-bank-of-america-merrill-lynch-report/story-e6frfmcr-1226041370155).