A deposit guarantee firm had its highest month of transactions this year in August, despite typically being a less busy month due to the seasonal slowdown of the property market in winter.
Deposit Power assists Australian borrowers and investors in buying property without the need for a cash deposit, and saw 15.5% more transactions in August than any other month this year.
According to general manager Grant Bailey, the increase in demand for the first home buyer product was a significant driver of the high figures.
“Potential first home buyers have stayed out of the market due to the higher prices we had from 2013 through to 2018, when property prices were up over 50%, in some cases more,” Bailey said.
“With the property market turning around, combined with the lower interest rates and more accommodating lending, we’re finding brokers are engaging and asking those questions about different opportunities as they see them arise.”
However, even with the more hospitable property market conditions and broker assistance in securing one of the many record-low loans on the market, many potential first home buyers don’t have the cash deposit needed to purchase a home.
“A vendor will most likely want a 10% deposit, so as the first home buyer may only have 5%, a Deposit Power Guarantee can assist in ‘topping up’ the additional 5% or otherwise guarantee the full 10% deposit,” explained Bailey.
Deposit Power Guarantees can be issued for up to 10% of the purchase price on most types of property with settlement terms of up to 48 months.
The online platform utilised by the firm has been crafted to be as frictionless as possible, with Bailey comparing its workings to that of a lender’s serviceability calculator.
“Our online system has all the algorithms, calculations, and checks in it so, from a broker perspective, as long as you know what the product does for the customer, our online system does the rest of the work for you,” he said.
“If it meets our conditions and the checks are all done, which happens in real-time, brokers can proceed to purchase the product online. It’s a seamless process. With Deposit Power, you’re always in the front of the queue because you don’t have to wait on anything. It’s all done through the system.”