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A new residential lending division has been launched by Catapult Property Group to assist first home buyers (FHBs) by offering low-deposit mortgages.
The Brisbane-based company, which has over $130 million of residential projects in Queensland and New South Wales, will enable FHB clients to obtain a home loan with a deposit as low as $5,000.
Catapult director Dylan Crowe said that the platform will provide FHBs with a “gateway” into the property market as government grants approach expiry.
“Catapult Property Group has developed a product to take the stress out of saving to buy a new home and provide people with a gateway to the property ladder,” the director said.
“This is a great opportunity to enter the real estate market. The clock is also ticking for first-time buyers of new homes in Queensland, with the state government’s $20,000 grant finishing on June 30, 2018.”
Further, the company’s director of residential lending, Paul Anderson, said he believes that Catapult’s industry relationships enable it to deliver positive lending outcomes to FHB clients.
“There are many banks that are happy to finance a purchase from as little as 5 per cent deposit and in some cases even less than that,” Mr Anderson said.
“When working with property specialists such as Catapult Property Group who have the builder, broker and financial advisers under one roof, it’s possible to secure a loan with as little as $5,000.”
Mr Anderson added that obtaining a loan with lenders mortgage insurance (LMI) allows FHBs to purchase a property without having to save for a “potentially unattainable” deposit.
“A lot of so-called experts say you need at least a 20 per cent deposit for a home loan to avoid lenders mortgage insurance,” the residential lending director said.
“Mortgage insurance on a $450,000 home purchase with a minimal deposit usually ranges from $7,000 to $14,000, which is added to your mortgage. This is a more realistic means of entering the property market than trying to save a potentially unattainable amount of around $100,000 for a deposit.”
In order to be eligible for a low-deposit loan, FHBs must be employed full-time with a stable employment history, a consistent rental payment record and a positive credit score.
[Related: FHB activity surges in NSW and Victoria]