With interest rates in the 3.6% and up ranges one would be tricked into thinking that people still had to have a large deposit to buy into their own home nowadays. You may be surprised to know that people can access funds for very little money as a deposit and still get rates that are as sharp as a tack.
Here is a guide as to how much of a contribution people need to access great funding for an owner-occupied home. The required figure below is for non-first home buyers purchasing an owner-occupied dwelling in Qld. It allows for all basic bank costs, mortgage insurance, stamp duties, a $1500 allowance for a solicitor, and government registration costs, and….. rates way below 4%. It provides for a stand-alone purchase, with no other properties as security.
A $400,000 property only needs $38,000
A $500,000 property only needs $50,000
A $600,000 property only needs $64,000
A $750,000 property only needs $80,000
A $1,000,000 property only needs $120,000
Clients who are struggling can be allowed to put in even less. They can still make it work and can be allowed to capitalize the mortgage insurance onto the loan (if they want to pay a slightly higher rate) and can cut between $5,000 to $35,000 off those amounts shown above.
For first home buyers, the news is even better. For example, a $400,000 property means that $34,000 is all that’s needed or only $42,000 for a $500,000 home, instead of the whole $50,000. Even less for them as well if they want to capitalize on mortgage insurance, $23,000 and $28,000 for the same valued homes.
First home buyers can even borrow without putting a cracker in if they have a Guarantor as well. We get it all the time “Oh, I thought I needed more than that”, so it comes as a pleasant surprise to buyers to learn that they can still get into property for very little money, and still be very much ‘in the market’ as far as rates are concerned.
Information provided in this article is general in nature, imsold property does not offer any financial advice, if you want to have a chat in regards to finance please don’t hesitate to contact Ian Robinson from Mortgage Choice on 0414 524 012