How much of a deposit do I need?

Any general questions you might have in regards to loans and finance.
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alexjong
Posts: 60
Joined: Wed Jun 17, 2009 5:21 pm

How much of a deposit do I need?

Post by alexjong »

Hi there,

I have recently found a couple of properties I would be interested in buying. The properties are around the 290k - 305k price range. The properties are located in the surrounding suburbs of the Gold Coast QLD. I am single with no children, so I am only looking at one or two bedroom apartments.

In my bank at the moment I have 15k to use as a deposit. I am currently a subcontractor. I only work for one company full time 38hrs a week. When I previously spoke with my bank they told me I would be unable to obtain a loan because I was a subcontractor.

I have a couple of questions:
Will banks accept my income as a subcontractor or should I go back to full time employment with a company?
Do I have enough of a deposit to obtain a loan?
Am I able to consolidate my 19k personal loan?

Any information would be awesome!

Alex

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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How much of a deposit do I need?

Post by Otto Dargan »

Hi Alex,

There are some banks that will accept your full income even though you are a subcontractor.

The maximum you will be able yo borrow is 95% of the property value. This means you will need a 5% deposit as well as funds to cover stamp duty and other property purchase costs. If you found a property for 300k your 15k would suffice for only a deposit. You will still need 5% - 7% more to cover the additional costs involved in purchasing a property.

With minimal deposit you would need to reduce your loan amount to compensate for consolidating your 19k loan. This is because the 19k in incorporated into your loan adding to your loan to value ratio.

If your parents or a family member is a property owner themselves you may be eligible for a guarantor or family guarantee loan.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

alexjong
Posts: 60
Joined: Wed Jun 17, 2009 5:21 pm

Re: How much of a deposit do I need?

Post by alexjong »

Hi Otto,

Unfortunately I am unable to obtain a guarantor as my mother does not have enough equity in her property.

So at the moment the main thing holding me back is my deposit size right?

Over all how much of a deposit do you think I will require. (In a dollar figure).

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Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How much of a deposit do I need?

Post by Otto Dargan »

Hi Alex,

Yes at the moment your deposit is what is holding you back.

For a 300k property you will require:
  • 5% deposit = 15k
  • 5% - 7% to cover property purchase costs = 15k - 21k.
Total = Up to 36k.

This is only a general estimate. If you would like more in depth information you might like to speak with one of our brokers. Call 1300 889 743 or enquire online.
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

alexjong
Posts: 60
Joined: Wed Jun 17, 2009 5:21 pm

Re: How much of a deposit do I need?

Post by alexjong »

Hi Otto,

Thank you for all your information.

You have been a great help.

Alex

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