There’s a new home loan product in the market that caters for people locked out of the property market because they can’t prove their savings history.
The Yellow Brick Road’s First Step home loan option does not ask the borrower to demonstrate a savings history with a bank or any other financial institution.
Instead, deposits for a First Step option can come from gifts from a parent or other family member, an inheritance, windfall gains and tax returns.
In other words, the buyer’s deposit is not a factor to get a home loan application approved.
This departs from normal rules where the lender, usually a bank, demands a borrower prove their deposit comes from a savings plan.
“I don’t believe this is an indicator of their ability to make their mortgage payments. More important factors are their income and their credit history; not the origin of their deposit,” said Yellow Brick Road’s founder Mark Bouris (and former chair of Wizard Home Loans).