How much military personnel are allowed to borrow?

Any general questions you might have in regards to loans and finance.
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Mikey Whimpreck
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Joined: Wed Mar 16, 2016 7:45 pm

How much military personnel are allowed to borrow?

Post by Mikey Whimpreck »

I am serving in the armed forces and am currently living abroad in East Timor. I am considering to buy a home in Brisbane, so I have been saving lately and have saved $85k till now.

I have been searching the property in the range of 400k to 500k. I will not be returning back home for another 12 months, how much can I borrow for buying the house?

Hoping to hear back from you guys.

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Otto Dargan
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Re: How much military personnel are allowed to borrow?

Post by Otto Dargan »

Hello Mikey Whimpreck. Welcome to the forums.

If you are an Australian military worker with a good income and have been serving in the military for a significant amount of time, you may be entitled to borrow up to 90% or even 95% of the purchase price!

If you are serving in the Australian Defence Force (ADF), your posting may be considered long-term if you are working overseas for over six months in which case, you may be entitled to receive many attractive benefits and allowances.

The purpose of this is to help with the cost of relocating and setting up residence overseas, as well as compensating for any undue hardship experienced whilst being posted.

Most of the lenders would require you to have a 5% deposit. You may also be eligible for the First Home Owners Grant (FHOG) and Home Purchase Assistance Scheme (HPAS), which will help you towards the purchase price. Also, there are no deposit loans available to those who can use a guarantor.

Cheers,
Otto
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Mikey Whimpreck
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Joined: Wed Mar 16, 2016 7:45 pm

Re: How much military personnel are allowed to borrow?

Post by Mikey Whimpreck »

Thanks for that. I also have few allowances, will the lenders accept them?

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Otto Dargan
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Re: How much military personnel are allowed to borrow?

Post by Otto Dargan »

Hi Mikey Whimpreck,

Defence Force workers are eligible to receive a number of allowances but, unfortunately, not all lenders may accept them.

The most common allowances that lenders deal with generally include the following:
  • Defence Service Accommodation subsidy which is generally given to defence workers living at a base, can be accepted by some lenders.
  • Private rent allowance - You may receive a rental allowance to help pay for the cost of your accommodation if you are renting privately. All lenders may not accept this allowance so applying with the right lender is key to getting a good deal.
  • Uniform allowance - If you are being paid for your clothing and uniform, then most lenders may accept the allowance.
The government provides a variety of lump sum payments to those in the military. However, these payments may not be taken into account by all lenders. Some of these payments may include:
  • Returned from combat overseas - You may be paid a considerable lump sum for your services. As these payments are usually tax free, they are generally not included by the lenders.
  • During your overseas posting - You may receive a bonus for your work for the Department of Defence at an overseas base. This bonus amount may be considered by some lenders, however, this may depend upon whether this income is ongoing or not.
If you want to learn more about this then you can have a look at our website. If you want to discuss your situation with one of our experts then you can call us on +61 2 8068 2257. You can also enquire online and wait for one of our experts to contact you.
Cheers,
Otto
Otto Dargan
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P | 1300 889 743
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Mikey Whimpreck
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Joined: Wed Mar 16, 2016 7:45 pm

Re: How much military personnel are allowed to borrow?

Post by Mikey Whimpreck »

Thanks a lot Otto for the reply.I’ll the form and wait for the broker to contact me. Have a great day.

Xavier
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Re: How much military personnel are allowed to borrow?

Post by Xavier »

Hi,

I’m also in the military and I’ve been researching home loans whenever I’m off duty. But I still don’t know many things. I want to learn about the additional costs that I may have to pay while buying a property. Is there anyone who can explain this to me?

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Otto Dargan
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Re: How much military personnel are allowed to borrow?

Post by Otto Dargan »

Hi Xavier,

You may likely have to pay a range of additional purchasing costs like:
  • Conveyancing costs - A conveyancer or a solicitor may need to be hired to handle the transfer of the property into your name. This may cost you anywhere from $800 to $1,500.
  • Inspections / Reports - If you need a building inspection, pest inspection and a strata report then you may have to pay up to $600 in total. It is recommended that you discuss these reports with your conveyancer to see whether they are required or not.
  • Loan fees - Some lenders may charge an application fee, settlement fee or a valuation fee. These fees may be negligible or amount up to around $900.
  • Lenders Mortgage Insurance - You may have to pay LMI if you are borrowing more than 80% of the property value. You can use the LMI Calculator to get a quote on this.
You can go through our website to learn more about these on our website.

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

Xavier
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Joined: Sat Jul 04, 2015 6:10 pm

Re: How much military personnel are allowed to borrow?

Post by Xavier »

Thanks Otto. I checked out your website and it helped me learn and understand many things in a short amount of time. I’ll continue to go through it for now. I’m planning on giving you a call when I decide to take out a home loan.

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