Minimum Deposit Required

What type of minimum deposit is required now for a loan?
I remember a few years ago, there were 0% deposit home loans.

A couple of examples:
1) On an existing dwelling for $450,000, what type of deposit would be required?

2) For a newly constructed dwelling with land for $500,000 (making me eligible for FHOG & no stamp duty), could you use the $15,000 FHOG as a deposit?
 
Please see belo

What type of minimum deposit is required now for a loan?
I remember a few years ago, there were 0% deposit home loans.

A couple of examples:
1) On an existing dwelling for $450,000, what type of deposit would be required?

Assuming PPOR typically, an 8 % deposit would provide coverage over a large range of lenders. One or 2 will let you get away with capping all or most of the lmi. Dont forget to allow for Stamps in your state and conveyance costs.


2) For a newly constructed dwelling with land for $500,000 (making me eligible for FHOG & no stamp duty), could you use the $15,000 FHOG as a deposit?

Same as above. If you have a fixed price build contract/ home and land package and can settle the land as the first progress payment, some lenders will advancethe FHOG. Most lenders WONT, and you need foundations laid to claim.

ta
rolf
 
What type of minimum deposit is required now for a loan?
I remember a few years ago, there were 0% deposit home loans.

A couple of examples:
1) On an existing dwelling for $450,000, what type of deposit would be required?

2) For a newly constructed dwelling with land for $500,000 (making me eligible for FHOG & no stamp duty), could you use the $15,000 FHOG as a deposit?

As Rolf said.

A couple other options to make up the deposit component:
1. Family guarantor loan.
2. Using equity from other properties (be sure not to x-coll).
3. Using gifted funds if available.

FHOG can be used to form part of the deposit, but not as proof of genuine savings.

For most of the higher LVR loans, you'll need to demonstrate 5% genuine savings history. Can get around it if you have equity, choosing certain niche lenders, etc - but something worth considering.

Cheers,
Redom
 
Thanks for the reply. What do you mean by x-coll?

So the days of 97% and 100% LVR loans are over?

Max LVR you're going to get these days is 95% + uncapped LMI (essentially up to 99.9%) and that's with Bankwest......not a fun deal to put up.

Cheers

Jamie
 
Thanks for the reply. What do you mean by x-coll?

So the days of 97% and 100% LVR loans are over?

If you have equity in another property (property X):
1. Set up a split loan against that property that amounts to the deposit required for your next property.
2. Use this as a deposit.
3. Get a separate loan for the new IP (property Y).

X-coll is when you skip to step 3 without doing 1 and 2 and instead just give the bank property X and property Y as security for the new IP loan. This does damage to your future investing, ability to draw out equity - essentially giving the banks more power than necessary. A quick search of the forums will show you exactly why the brokers advice against it.

Cheers,
Redom
 
Thanks for the answers.
So more specifically, $70k per year salary, $30k in inheritance which I would like to use as a deposit. Is there borrowing capacity and if so, how much?
 
Hi Brizza,

70k salary with no debts and no dependents could allow you to borrow a certain amount however it varies with different banks. Some allow you to borrow more, some allow you to borrow less. To be safe you borrowing power would be enough for your purchase.

However your $30,000 inheritance is another issue on its own. It is not genuine savings if you have just received it recently.
 
Hi Brizza,


However your $30,000 inheritance is another issue on its own. It is not genuine savings if you have just received it recently.

As long as you leave the inheritance money in your account for at least 3 months, it should qualify as genuine savings.

If you buy off the plan, you also need to have the money in your account for at least 3 months before you pay the initial deposit. Otherwise you will have to save an extra 5% to show genuine savings.
 
$70k salary.
$30k deposit which has been in account for over 3 months.
Single.
No credit cards.
No personal loans.
No dependents.

What do you guys think my borrowing capacity would be?
 
$70k salary.
$30k deposit which has been in account for over 3 months.
Single.
No credit cards.
No personal loans.
No dependents.

What do you guys think my borrowing capacity would be?

I havent dome the numbers, and to be fair there isnt enough data( like im sure you dont live in a rent free tent : ) )


Your likley issue isnt borrow cap,its equity contribution, which is quite common.

off the cuff, id say bankwest will allow you to buy a 350 kish ip

ta
rolf
 
Hey Brizza,
Are you buying a home or IP?

What you can borrow depends a lot on the costs - eg, if you don't have to pay stamps and can get fhbg you'll be able to borrow more than if you hoped to get an IP, where stamps will take a large chunk of your cash.

Easiest way to get your answer is to message a broker with all your details. :)
 
Hey Brizza,
Are you buying a home or IP?

What you can borrow depends a lot on the costs - eg, if you don't have to pay stamps and can get fhbg you'll be able to borrow more than if you hoped to get an IP, where stamps will take a large chunk of your cash.

Easiest way to get your answer is to message a broker with all your details. :)

A home, not an IP.
 
A home, not an IP.

Hi Brizza

With that information alone and assuming the information is true and correct there are no other variables like high living expenses, HECS debt, dependants, spouse or defacto relationships etc, you could borrow between 350K and $480K depending on the lender.

However, $30K would only be enough if you plan to buy off the plan or brand new property in NSW ($450-$500K) as a first home buyer and you would have to pay LMI which can be capitalised.

If you are buying an existing property for $450K you would still need another $12K as a bare minimum for a 95% lend plus uncapped LMI (only offered by very few lenders).

We would recommend saving more than the extra $12k to increase your loan options.

To confirm this, we would need to do a full assessment of your situation and make reasonable enquiries to ensure any recommendations we provide are not unsuitable.
 
Keystart (WA GOVERNMENT) will provide finance for as little as 2% deposit with 1% being genuine savings.

No LMI either but a higher rate and earning/lending caps apply.
 
Back
Top