HomeStart Home Loans offers unique mortgage packages to borrowers who are being turned down by mainstream lenders.
HomeStart is a lender created by the South Australian Government in 1989. It reports to the Minister for Housing and Urban Development, and offers home loans with less upfront costs, a lower initial deposit and an innovative repayment system that keeps monthly payments at a stable amount despite changes in variable interest rates. HomeStart is a community home loan lender, and offers classes and seminars to new homebuyers that encourage financial literacy.
Home loans provided by HomeStart Home Loans
This is available to residents who have obtained a diploma, degree or higher qualification. Specific tradespeople, technicians, police officers and nurses are also welcome to apply for this low deposit home loan. The loan allows eligible borrowers to buy an existing home or build a new one with a deposit of as little as 3%. Borrowers have the option of a variable, fixed or split interest rate, with the fixed rates being available from one to three years.
HomeStart has a unique repayment system, where your charges remain constant, despite any fluctuations in the variable rate. Unlimited additional repayments can be made on variable rate loans without penalty, or up to $10,000 a year during the fixed rate period. A redraw facility is available for variable rate loans.
Low Deposit Loan
The Low Deposit Loan is available to all South Australian residents towards the purchase of a new home in a metropolitan area. These loans require a deposit of only 3%, with HomeStart’s own loan provision charges instead of lenders mortgage insurance (LMI).
Borrowers may choose a fixed interest rate for up to three years, a variable rate or a combination of the two. HomeStart has a unique repayment system, where your charges remain constant, despite any fluctuations in the variable rate. Unlimited additional repayments can be made on variable rate loans without penalty, or up to $10,000 a year during the fixed rate period. A redraw facility is available for variable rate loans.
HomeStart Home Loan
The HomeStart Home Loan is available to anyone, and anywhere in South Australia. You can purchase an existing home with as little as a 5% deposit, or put 8% down to build a new home from the ground up. The HomeStart Loan Provision Charge will take the place of the LMI which typically accompanies these types of low deposit home loans.
You can choose whether you want a fixed, variable or split interest rate for your loan. Unlimited additional repayments can be made on variable rate loans without penalty, or up to $10,000 a year during the fixed rate period. A redraw facility is available for variable rate loans.
Seniors Equity Loan
South Australian seniors can tap into the equity of their existing home and obtain the financing they need towards a dream vacation or even to just supplement their retirement income. You choose whether you want to make repayments with the security of knowing that your home’s value will never become less than the amount of money owed on it. The amount of money available will depend on the value of the home and your age, and increases each year from the time you are 60 until you reach 85.
Home Equity Loan
Existing HomeStart borrowers may qualify to tap into their home’s equity to fund certain home improvement projects. These could include renovations, landscaping projects and major installations such as HVAC systems.
Borrowing boost loans
You can combine your other HomeStart home loan with an Advantage Loan to increase your buying power without increasing your monthly repayments. With as little as a 3% deposit, you could increase the value of your other HomeStart home loan by as much as $45,000. This is available to households who earn up to $60,000 each year and is not subject to repayments until the primary home loan has been repaid. Unlimited additional repayments can be made on variable rate loans without penalty, or up to $10,000 a year during the fixed rate period.
The Breakthrough Loan is an addition available with another HomeStart home loan that will allow you to borrow up to 30% more without having to pay those funds back until your primary loan has been resolved. This added option to your home loan can be used towards the purchase of a new home or the refinancing of an existing home. No interest is charged and repayments aren’t required until the home is sold or refinanced.
The Wyatt loan works in conjunction with a HomeStart home loan and allows you a period of five years without any interest accumulation or repayments towards its value. To qualify, you have to be a South Australia resident for at least five years and have a yearly salary of less than $40,000. This boost loan is supported by the Wyatt Trust, a non-profit organisation that is committed to providing a better quality of life for Southern Australians.
Combined with a HomeStart home loan, the EquityStart Loan can give you up to $50,000 in additional funding to be used towards the purchase of a Housing SA home or to build a new home. To be considered, at least one applicant must be a current leaseholder in a Housing SA property. Repayments are not required until the primary home loan is repaid, and any voluntary repayments made will go towards the balance of the EquityStart loan first.
How to apply for a HomeStart home loan
If you’d like to apply for a home loan from HomeStart, please speak to your local mortgage broker or contact HomeStart directly. You’ll need some documentation when applying:
The following personal information will be required to apply for a HomeStart home loan
- Employment. The nature and duration of your employment, such as full or part-time.
The following financial information will be required to apply for a HomeStart home loan
- Income. Details regarding all of your household income including any Centrelink income.
- Debt. Other financial liabilities you may have including loans and credit card debts.
HomeStart will also use a phone interview to determine if you are eligible for one of their home mortgage products. They will ask that you fulfill the following criteria:
- Residence. You must be purchasing a residential property in Southern Australia.
- Age. You must be at least 18 years of age.
- Savings. You must have at least $3,000 in savings or have a good rental history for the previous 12 months.
Compare the different loans and boosts being offered by HomeStart to determine which loan or combination will give you the best deal for your circumstances. These high credit, low down payment loans can be very helpful to South Australians who have been struggling with obtaining credit from traditional home loan lenders.