In the hopes of helping keep the Great Australian Dreams alive, Sydney-based AffordAssist rolls out a solution that would help many buyers get over the first big hurdle of the process — coming up with a mortgage deposit.
With AffordAssist, buyers can defer their home loan deposit and pay it off later, allowing them to break into the market sooner.
How does AffordAssist work?
AffordAssist provide a Deferred Deposit Agreement (DDA) between the property seller and the buyer — with such agreement, approved lenders and mortgage brokers are able to offer home loans with up to 90% loan-to-value ratio. This may include all or part of the deposit, and a no-interest payment plan on the deferred deposit
In a nutshell, AffordAssist replaces the need for the full cash deposit — this means that buyers can enter the market with an initial part-deposit and pay the balance of the deposit most typically within 60 months without interest.
Who are eligible to secure a loan through AffordAssist?
The eligibility of borrowers to secure a loan with deferred home loan deposit will be based on their annual incomes.
When applying, borrowers will need to accomplish the Pre-Qualification Form and the Fast-Track Readiness Form. These two forms determine whether the applicant is eligible for the program.
The Pre-Qualification Form assess financial circumstances of borrowers. The form asks for indicators such as the capacity to borrow and the property details.
The Fast-Track Readiness Form, on the other hand, is for the program to know how committed the borrowers are to owning a home. This form asks several questions that explore the intention of the applicant.
What are the eligible properties under AffordAssist?
To purchase a home under the AffordAssist program, the buyer must select from the approved list.
AffordAssist director and founder Anthony Aoun said the approved properties include all residential property types.
“Buyers can purchase off-the-plan, brand-new, or previously lived-in dwellings — they just need to select from the AffordAssist approved list. The fee for this comprehensive service is generally paid by the property seller,” he said.
However, the buyer can source the property themselves by using an AffordAssist approved buyer’s agent. With this option, the buyer can engage with the agent for a prepaid flat free.
The buyer can also find their own property with the AffordAssist team offering free phone assistance.
What are the fees associated with the AffordAssist program?
Here is a breakdown of the fees applicable to buyers depending on certain circumstances:
Buying from the AffordAssist Approved Property list
Buying a property from outside listings
A service fee covering the governance process, eligibility and managing the Deferred Deposit Agreement (DDA) is payable. $2,000 + GST
Buying through AffordAssist Approved Buyer’s Agent
DIY+ AffordAssist — flat fee, $3,000 +GST
Full buyer’s agent service – flat fee of $9,000 + GST
Buyers might also need to shell out $600 + GST to be paid to the solicitor advising them on the DDA.
Mr Aoun said buyers will not be charged for referral fees from lenders, mortgage brokers, and solicitors.
“AffordAssist Approved mortgage brokers cannot charge clients a mandate fee. Their service fee is paid by their lender,” he said.
Does AffordAssist have partner banks and lenders?
AffordAssist has a panel of approved lenders and mortgage brokers that can offer loans of up to 90% of the property’s value.
“Approved lenders and mortgage brokers know AffordAssist can be used for all or part-of the deposit when assessing eligibility and maximum property budget and they know how to process AffordAssist applications. All assessments are at arm’s length and follow lenders’ duty of care,” he said.