How to buy a house as a millennial with a low deposit?

Any general questions you might have in regards to loans and finance.
Jevan
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Joined: Wed Jun 12, 2019 1:37 pm

How to buy a house as a millennial with a low deposit?

Postby Jevan » Wed Jun 12, 2019 1:40 pm

Hi, I work in IT as a hardware technician earning roughly $47k plus super while my wife earns $52k. We’re stuck on a rental cycle paying off someone else’s mortgage. The problem is we’ve only been able to save up a $22,000 deposit which is barely 5% of property prices near where we live. Our financial goal was to be debt free which we’ve accomplished so far and we only have a couple of credit cards with a $2,000 dollar limit on each card. We would much rather get in now and start making mortgage repayments to build up equity in our own home. Can we use the first home owners grant towards the deposit? And what's the process like to buy a house with a 5% deposit (including the grant) as a millennial/first home buyer?

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Otto Dargan
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Re: How to buy a house as a millennial with a low deposit?

Postby Otto Dargan » Wed Jun 12, 2019 2:51 pm

Hello Jevan. Welcome to the forums.

Yes, the first home owners grant (FHOG) can be used as part of your deposit. Generally, the lender that you qualify with will apply for the grant on your behalf if you’re eligible and is advanced at the time of settlement.

Typically, you’d require at least a 5% deposit and that can include the FHOG. In order to qualify for a 95 per cent home loan:
  • Deposit: A 5% deposit and this include the FHOG.
  • Steady income and employment: You should be earning a regular income to support your mortgage repayments.
  • Genuine Savings: Most lenders require the deposit to have been saved by the borrower himself, however, genuine saving’s not a requirement with all lenders.
  • Property location: Lenders have postcode restrictions for the properties they can accept as security.
  • Credit history: Lenders prefer a clear credit history but a few adverse listings can be considered when borrowing up to 95% by select lenders.
  • Credit scoring: There can be many reasons for having a poor credit score but some of our lenders assess it on a case by case basis using a common sense approach.
If you’re outside the bank’s policy, it’s all about building a strong case and applying with the right lender.

Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or by filling in our free assessment form to find out if you qualify for a low deposit home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Jevan
Posts: 3
Joined: Wed Jun 12, 2019 1:37 pm

Re: How to buy a house as a millennial with a low deposit?

Postby Jevan » Wed Jun 12, 2019 4:12 pm

Cool. The postcode we’re looking to buy is 2480. You’re postcode calculator spit outs “medium risk”, what does it mean?

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Otto Dargan
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Re: How to buy a house as a millennial with a low deposit?

Postby Otto Dargan » Wed Jun 12, 2019 4:23 pm

Hi Jevan,

That’s right. The postcode 2480 is considered “medium risk” by lenders which essentially means the property may be acceptable subject to a fully satisfactory valuation by the lender. Banks will rely on the valuer’s assessment and comments.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

Jevan
Posts: 3
Joined: Wed Jun 12, 2019 1:37 pm

Re: How to buy a house as a millennial with a low deposit?

Postby Jevan » Wed Jun 12, 2019 6:38 pm

One final thing, is the LMI payable upfront or can it be added onto the home loan?
What will the LMI amount be in our case?

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Otto Dargan
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Re: How to buy a house as a millennial with a low deposit?

Postby Otto Dargan » Wed Jun 12, 2019 7:04 pm

Hi Jevan,

Lenders Mortgage Insurance (LMI) is typically only applicable when the loan amount exceeds 80% of the property value.
You can use our LMI calculator to get an LMI quote and compare LMI premiums of different lenders.

The LMI can be capitalised or added on top of the home loan with some of our lenders.

We specialise in low deposit home loans.

Speak with one of our specialist mortgage brokers by giving us a call on 1300 889 743 or by filling in our free assessment form to find out if you qualify for a 95% home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts


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