• income verification
• savings history
• previous tax returns
• bank statements history
• loan application form
• documents pertaining to the property being bought

Approval of  low deposit home loans

Financial institutions will take in to account all your earnings (salary, tax benefits plus others) when assessing your income. It is very important to have a good credit history with no defaults or bankruptcies. In most of the cases, approval becomes easier and quicker provided the documents pertaining to the loan are all in order.

Benefits of low deposit home loans

There are lots of benefits which one gets by attaining a low deposit home loan. Many financial institutions offer benefits like low standard variable rates, no monthly fees, no early repayment charges after a certain period. There are certain financial institutions which offer a switch facility where one can switch from a variable interest rate to fixed interest rate. There are also lenders who offer higher periods of repayment (e.g. weekly or fortnightly). Higher periods of repayment would mean less monthly instalments meaning less repayments in the long run. By law all borrowers must receive statements every six months detailing all the transactions of the loan in question.

Low deposit home loans provides a great opportunity of home ownership and could be one of the easiest solutions to owning your home.

Rent to buy houses are also known as lease options and rent to own homes. Please ensure that you understand the pros and cons of rent to buy houses before entering into an agreement with your provider. In rent to buy houses, a prospective leaseholder enters into an agreement with the property owner to buy a house within the stipulated date and more importantly at the current market value.

The leaseholder must be in a position to pay the rent on time and in full, which is slightly more than the market rates. This extra payment goes towards the deposit of the house that has been leased. In other words, the occupant is contributing continuously to the purchase value of the property as if reinforcing, that he/she would buy the house.

Get things clearly

Rent to buy houses are regarded as a great option to those with limited credit opportunities however, people entering into these agreements must ensure they can afford to pay the repayments throughout the lease term. Failure to do so can render the agreement void in many cases so ensure you know what your rights and responsibilities are before entering into such agreement. If you decide not to purchase the house or you are not in a position to buy the house at the end of the agreement the payments that you have contributed will not be refunded. Therefore it is imperative that you are committed to carrying through with the purchase of the property before entering into such agreement.

If the housing market appreciates whilst you agreement period is valid then you will no doubt gain equity in the property enabling better options when you choose to refinance at the end of your agreement period. But know that the housing sector is highly volatile and you never know when it will be tipped against you. So, do not opt for rent to buy houses merely speculating that the housing market will appreciate.

Points to look into

Before planning to apply for rent to buy houses the renter must ensure they would be able to follow through with the purchase of the  house within the date prescribed in the lease option agreement. Further, you must take into consideration your credit rating, weekly earnings and other probable events such as marriage, childbirth etc., that could affect your current financial status. Another important thing to ensure is to find out beforehand whether you would eligible for a mortgage before opting for rent to buy houses. This would prove to be a great help to you because you will not need to run around at the last minute looking out for a loan that may not eventuate as lenders are renown for delaying home loan applications for little regard of borrowers needs. As you may own the house in future inspect it thoroughly and determine its worth by ensuring you get building and pest inspections carried out.