How to get a zero deposit bond?

How to get a zero deposit bond or home loan?

By HouseFurb, Feb 05, 2019

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Saving a deposit for a home loan is one of the most difficult challenges first time home buyers experience. Banks normally require a 5%-20% deposit for home loans, especially for first time buyers who have never been bond holders

Getting 100% financing for a home is not impossible, even with the current challenges our economy is facing. Banks prefer home buyers who will be living at the homes they are applying financing for because they have proven to pay their loans on time.

With the help of the 5 points below recommended by HouseFurb, getting a zero-deposit home loan should not be a problem:

  • Maintain a clean credit score: You must have a clean credit history and credit rating. South African banks do not make exceptions to this policy in cases with no-deposit loans because of the legal requirements for them to lend responsibly
  • Have a good repayment history: You have to show that you've been paying all your debts and loans back on time. Every credit card payment, car loan, and timely rent payment can help you convince the banks that you’re a responsible borrower
  • Have consistent employment income: You must have a stable, ongoing job that provides an income high enough that you can afford to repay the loan. Professionals in certain occupations (e.g. accountants, lawyers, doctors) are much more likely to be approved for a home loan with no deposit because they are generally considered to be at a lower risk of losing their jobs
  • Choose a good property type and location: Lenders will be more likely to grant a no-deposit loan to someone who is looking to buy a property in a typical area, like a capital city, and the property should not be “unusual” – in other words, it should be a standard house, townhouse, flat or vacant land to build on. A higher deposit is likely to be required for risky areas
  • Consider having a guarantor on the loan: A guarantor is someone who owns a property and is legally paying back the entire loan with a track record. If the current loan applicant cannot pay for the loan, then the bank can take guarantor's property provided that the value of the property is equal to or more than the loan amount. First time buyers can use their parents as guarantors. This gives banks the security to be confident enough to issue the 100% home loan.

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