Home Loan Tips: 100% loans
With interest so low at the moment the number of 100% home loans being granted by the banks as increased steadily. This is partly due to Banks lowering their lending rates and because there has been an increase in home loan application over the past year or two.
Rudi Botha, CEO of leading mortgage originator PA BetterBond has noticed the buyers are opting to using the money they would usually pay as a deposit for they home loan on other purchases.
Botha told propertyloans24.com that buyers are choosing to use those funds to pay the transaction costs or to buy a more expensive property with a 100 percent loan.
â€œA very large percentage of the loans we obtained for buyers over the past three years have been for 100 percent or more of the purchase price – 108 percent loans having been available to first time buyers to include the transaction costs,â€ Botha said.
Property Price growth and Interest Rates are two of the most important points to consider before you apply for a 100% home loan. Ideally, you’ll be looking for high growth rates and low interest rates. This would help to avoid you having negative equity if you were forced to sell again shortly after buying.
Although, in general taking the 100% home loan option is safe. Most people stay in their new home for at least 5 years and over this period your property would have increased in value.
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