First home construction

[newtoinv]

I am looking to build a my first home in Perth - unsure which area yet. I don't have much in the way of savings and I am wondering if I can use my FHOG as contribution.

I have heard that the bank can not accept fhog as contribution for fhog because it is not paid at settlement? It is paid later on during the construction peroid which means I have to contribute the funds up front (which I don't have) and then i'll get that money down later down the track from the fhog. Is this correct?

Also, can anybody shed some light on Keystart? I found out about them today apparantly they only require a 2% deposit + no mortgage insurace applies? Is there a catch of some sort?

 

[Rolf Latham]

Hiya New

There are ways to do that deal if the 21 k is enough to fund a 5 % deposit plus any costs.

Seek the services of a good independent broker and they will talk you through the options

ta
rolf

 

[Peter_Tersteeg]

As suggested, if the land and building are all in the one contract, you can get the FHOG right away, but realistically this isn't the case most of the time.

There are alternatives which lenders will allow, such as using an overdraft or personal loan to settle the land, then paying this back (and closing it) once the FHOG is paid. If it's presented properly some lenders can accept this.

The other problem that often comes up is the builder wants a 5% deposit of their own prior to getting the plans approved. Again this is usually funded out of your own pocket (but of course there are alternatives.

Finally keep in mind that many lenders now require you to show evidence that you've managed to save some money of your own over a 3 month period (or longer). They don't accept the FHOG or other gifts as a contribution to this.