First home buyers deposit requirement is one of the major eligibility criterion to commence buying process or first home buyer home loans process. As usual client need to have minimum of 5% deposit to buy their first home. Bank classify the deposit as genuine savings or non genuine savings. The amount showed on applicants account minimum of 3 months on the bank statement is considered as genuine savings. All other form savings and deposit is considered as non genuine savings. Some bank offer first time buyer home loans with 5% non genuine savings on their special offers. If client find difficulty to have 5% genuine saving and like to purchase the property before 3 months is over staying fund on the account, client can take this opportunity. Some bank account monthly rental expense as genuine savings.
How much deposit required ? (First home buyer deposit)
5% deposit is required to offer to have home loan application approved. The policy of home loan largely determined by LMI insurer when your loan is subject to LMI. For a full doc home loan loan amount more that 80% property value required Lender Mortgage Insurance. For a low doc loan loan amount more than 60-70% of property value required Lender mortgage insurance. Bank usually finance the cost for LMI on top of home loan amount not exceeding 97% of property value. It means a first home buyer can actually get up to 97% loan including the cost for LMI.
Client also need to allow cost for
- stamp duty.( depending on State and price of property. Eligible first home buyers are exempt from stamp duty.
- Legal cost ( allow up $15,000- $2100 to pay the solicitor to act on you behalf)
- Inspection cost ( allow cost to find and visit properties) Home inspection checklist
- Pest inspection cost ( allow app $550 for pest inspection before move into the property)
- Notional cost ( some cost for renovation, outstanding council rates could be required to pay)
- Government and bank fees ( bank application fee, settlement cost, loan facility fees, government stamp duty for mortgage, mortgage registration fee etc sometimes cover with financed amount not exceeding 97% of property value)