A specialist lender is calling on brokers to make customers aware of low deposit lending options available to home buyers looking to take advantage of lower property prices.
Saving a 20% deposit can be a challenge for many home owner hopefuls, even for those living with parents longer to save.
However, there are options. Specialist lenders like Liberty offer low-deposit loans that allow qualified customers to borrow up to 95% of the property price.
Group sales manager at Liberty, John Mohnacheff, encourages brokers to make customers aware of these low deposit loan options for both owner-occupiers and investors.
He said, “Brokers should give the customer every option so they can make an educated decision.”
He added it was the “broker’s job to present suitable solutions for the person who wants to borrow”.
“Instead of saying ‘go away and wait a few more years’, you can say ‘you’ve both got great jobs, you’ve found a dream house, here’s an option to help you buy it now’,” he said.
He said Liberty also understood that many first-time buyers often have gifted funds from family members to help them get on the property ladder sooner.
According to Mohnacheff, just because deposit funds might not be saved up over an extended period of time, it doesn’t mean the borrower isn’t creditworthy.
He said, “There are all sorts of factors that show people can service debt. If people have a proven employment record and financial history, we’re happy to engage with them and look for ways to help get them out of the rental cycle.”
While some low deposit loan options may attract higher interest rates, Mohnacheff said the difference may be nominal compared to significant upside.
He added, “If it means the difference between owning your own home or remaining locked in the rent cycle, paying a marginally higher interest rate is a cost that many would-be home buyers consider sensible.”
“Low deposits loans are for people who can afford them, not for people who desperately need them.”