No deposit home loans are one type of loan product which is offered by banks and financial institutions wherein you can avail of home loan and buy your home without any deposit. No deposit home loans are nowadays very common. This home loan scheme was brought mainly because of the rising costs of property and people’s inability to buy or finding difficult to make initial down payment. Moreover, with rising costs and slackening economy, banks and financial institutions wanted more and more customers and hence started the a new scheme ensuring no deposit home loans were used to promote real estate. For a common man, it is very difficult to wait until you have sufficient deposit in your bank account and then buy a house. In such cases, banks and financial institutions help in offering no deposit home loans to make things easier for individuals to buy homes without arranging for any deposit. With no deposit home loans, you can borrow up to 100% of the purchase price of the property.

More about this loan

This loan is available for both new and old properties. It is generally taken by people going for home loan for the first time. Financial institutions offer this type of loan to professionals who have a solid savings account with sufficient funds and good income. Moreover, it is limited to certain types of properties. The important thing about no deposit home loans is that it is dependant on the cost of the property. It is seen that as property price increases, extra buying costs also increases. One must take in to account all these factors before going for no deposit home loans.

Eligibility and documentation

There are important requirements which every bank or financial institution takes into account before sanctioning no deposit home loans. An individual or joint applicant who is employed or self employed with good household income can apply. Total household income requirement varies from one institution to another and also depends on the amount of loan being taken. Income is assessed and one’s repayment capacity is taken before disbursing the loan. It is very important to have a good credit history. Bank statements for the last six months is an important document requirement along with salary, tax worksheet and other property documents. Certain lenders allow family members or friends to provide guarantee to reduce the amount of exposure. Besides this, there are other security documents which need to be provided to the lending institution.

Benefits of no deposit home loans

When applying for no deposit home loans, interest rates are no doubt very attractive as well as flexible. One can choose different types of interest rate either variable interest rate or flexible interest rate depending upon their repayment capacity. Variable interest rates can change depending on the market conditions. Interest rates are available for 40 year term depending on the age and service of the individual. Longer the period lesser will be the equated monthly installments and also making an expensive property affordable. Financial institutions offer various repayment options also.  

Many feel that opting for no deposit home loans is the best option for buying a property as one need not wait to save.