Yes, you need a small deposit of “approximately” $10,000.
Getting a loan from any bank means that you will require a deposit, however when you combine your $15,000 Government First Home Owners Grant with the Builder’s contribution, you automatically unlock $30,000 of additional deposit you can use as a larger deposit amount.
Quantum makes it easy for Aussies to get their foot in the property market and escape the rent trap.
To be eligible to receive the $15,000 contribution, you simply need to be able to service a mortgage. That means having things like a good credit rating, a stable job and paying your bills on time. Basically, if a bank can look at your current financial situation and be sure you can meet the mortgage repayments – then you are eligible.
Usually, the answer is no! If a partner or spouse you live with owns or has owned a property, according to QLD government guidelines, you are not eligible to receive the FHOG.
However, if your partner doesn’t live with you, it may be that your partner is not considered a “spouse” and therefore you should’qualify for the $15,000 First Home Owner Grant.
You will however need to contact the relevant government department to find out more. If all goes well, we can then proceed to assist you.
Some home loan providers allow first home buyers to borrow up to 95% of the property value. This is called a low deposit loan because you have a deposit under the recommended 20%. Using the example of a house price of $500,000, instead of saving a mega $100,000 for a 20% deposit you would only need $25,000 with a 5% deposit.
It’s also important to remember if you’re going to take out a low deposit home loan, you’ll be charged lenders mortgage insurance (LMI). LMI is scaled, so the more you borrow the higher you’ll pay for this insurance.
A common misconception is that LMI is protection for for you in the case you get behind on your repayments. That is not right. LMI is actually an insurance that covers the lender if you forfeit on the loan.
The only way you can avoid the cost of LMI is by asking your parent/s or a family member to be a guarantor for your home loan, which means they will put up a portion of their own home as security. First home buyers may be happy to hear that if they can organise their parents to be guarantors, then they may be able to take out a loan with a low deposit.
Now let’s run through zero deposit home loans, otherwise known as no deposit loans. Before the GFC banks and financial lenders allowed first home buyers to take out a home loan without a deposit but these days the only way you can apply for a zero deposit home loan and borrow 100% of the property price is if you have a parent or family member as guarantor.
The reason home loan providers allow you to borrow without a deposit if you have a guarantor is because they know if you are unable to meet your home loan repayments and you forfeit on the loan, any money they can’t recover through selling your property can be seized from the portion your guarantor put up of their home. That’s why guarantor loans can be risky. An alternative option is for your parents to help you with the deposit. For example, you could aim to save 5% and your parents would give you the additional 15% to make up a 20% deposit.
Yes and no, as it comes with conditions. It is possible to use your super for your first home deposit if you take advantage of the First Home Super Saver scheme (FHSS). It is designed to help first home buyers save a deposit faster by contributing money to super.
You can then withdraw these contributions to form part of your deposit. The FHSS works this way because contributions to super are taxed at a low rate, so more of your money goes towards your first home deposit.
1. Check your borrowing power
Make sure you check that you can comfortably service the loan, even if there is a rate rise, by punching in your numbers into our borrowing calculator. To give you a good example, if you wanted to borrow the average Australian home loan amount of $500,000, you (and or your partner) would need to be earning around $75,000 per annum.
2. Show genuine savings
While getting a parent or family member to act as a guarantor may mean you can take out a home loan with a zero deposit, you will still need to show the lender you can service the loan on your own income. The lender will want to see proof of genuine savings for at least 3 months. A smart way to ensure you’re always putting away money is by setting up a direct debit from your bank account to your savings account on payday.
3. Clear any debt
The lender will also want to know if you have any current debt on a credit card, store card, personal loan or car loan. If you do have debt, it’s a good idea to tackle it before applying for a loan.
4. Reduce your credit card limits
Any credit you can draw on will be taken into consideration when the lender is assessing you for the loan. So the lower your credit card limit the better.
5. Check your credit score
Did you know your credit report may have information on you reaching back to 5 years ago? That’s why it pays to check what your current credit score is online, to ensure it’s clear when you apply for your first home.
6. Keep your life consistent
Changing jobs or purchasing an expensive item before applying for a home loan will be a red flag to the lender. So, in the months prior to making a loan application, show consistency by staying in the same job and by avoiding any big purchases.