• Angela Dye

Q&A's on deposits for property purchases

Updated: 6 days ago

Angela Dye answers some questions about deposit requirements in various scenarios when looking to buy a home.

  1. I am 31 years old and have $40,000 in savings and I have a stable job – is the $40,000 enough to look at buying an investment property or am I being unrealistic and if so what is a good deposit to start with? Answer: To purchase an investment property you will need a minimum of 10% deposit plus the stamp duty and fees. This can be in cash or from equity in another property. Banks will lend 90% of the purchase price. Fees will include stamp duty, mortgage insurance, legal, and general loan fees. Please make a booking to call Ang to discuss your scenario further.

  2. I am a 35-year-old married with 4 children under 13 and currently rent I have very little deposit, but I earn $120,000 a year what would the bank expect from me to qualify for a home loan? Answer: If purchasing for an owner-occupied home you will need a minimum of 5% deposit along with stamp duty, mortgage insurance, legal, and general loan fees. We have banks that will lend 95% of the purchase price. Please make a booking to call Ang to discuss your scenario further.

  3. What are the acceptable types of funds you can use as a deposit for purchasing a property? Answer: There are several acceptable types of funds that can be used to help purchase a property, these include the following: cash- your savings, gift from family member, use of parent’s equity in their property, equity in another property owned by you, proceeds from a sale, or Inheritance. You may qualify for the First Home Owners Grant, this can also be used as a deposit however, it may not be enough to cover the full deposit needed therefore other funds will be required to meet the banks criteria.

  4. Can I use a personal loan as my deposit to purchase a property? Answer: Most lenders would not treat this as an acceptable way to raise a deposit.

  5. Some lenders advertise 100% home loans, how does this work? Answer: To offer a 100% home loan the bank would require two properties as security for the one loan. Keep in mind that the banks’ lending criteria is always the same. For 100% home loans they would be simply spreading the debt across the two properties.

If you any have questions about how you can buy a property or you have home loan questions, book a call to Ask Ang for an appointment to discuss your personal scenario.

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