FHOG - what banks will let you use as a deposit?

I have read that SOME banks allow you to use FHOG as part of your 5% deposit but everyone I have spoken to says that you can't. Would anyone know?

If you currently rent a house then they will. We used St George bank for our mortgage and they consider your rent as showing a 'savings history' and will therefore allow you to use your FHOG towards your deposit. You will however be borrowing 97% of the property price as they also loan you the amount to cover the LMI, which is pretty expensive. You will still need considerable savings though as you will have to pay the 5% deposits for the land and then the builder (if you are building) and you'll need extra if your valuations come back under what you've paid.

We moved with inlaws to save & have saved 5% of land price but bank told us we need 5% of total price. I was hoping there was a way we could use fhog for the rest.

I think in that situation you'll need 5% of the total price as genuine savings then. Easiest way to find out for sure would be to talk to a broker.

I used my 5% savings to buy the land I wanted
I used the FHOG as deposit for the house costs.

Loan through BankWest (Organised by my broker)

Talk to a mortgage broker - they know all the ins and outs. Also which bank has what requirements.

I managed to get a loan a few years back. Newly self employed ~ 15 months, single with minimal savings. Most banks i spoke to more or less laughed me out the door. Met with a few different brokers - some couldn't help without using parents house as collateral, however finally found one that was able to come up with an option that worked.

Thanks, Ive spoken to 3 mortgage brokers & all say no it can't be done. Yet I hear people like ST13 that can use it. I go to my bank & they say yes it can be done then went to go through pre approval & apparently the mortgage lender requires 90% not 95% like an established home. So back to square one. I will be looking into bank west.

Thanks

I still think there will be a lender prepared to let you use the FHOG as part of your deposit, even on the Aussie Home Loans website they say so, see bottom of this page:
http://www.aussie.com.au/mortgage-broke ... -grant.htm

There are good and bad brokers though even in the larger companies - ask around and see if you can get one on referral (an actual person not a company) and when you do let them know who referred you. When the broker knows they are getting work via a referral it can actually make a difference because if they are unable to help you it may prevent that person from referring work to them again, so it encourages them to go the extra mile or at the very least maybe give you some pointers of how you might be able to make it work in 3 or 6 months etc. EG even getting rid of a credit card with a $2k limit rather than saving for a bigger deposit can make a significant difference in how your application is viewed and your borrowing capacity.

Also are you looking at buying a block that is not yet registered? The reason I ask is that if you have enough to secure a block now and its say 12 months away from being registered, in that 12 months you could go through the preliminary admin stuff with a builder as well as save for the other 5% required for the build. Not an ideal scenario, obviously exhaust every option to have in using the FHOG as a deposit so everything is more black and white but if the land is a while away from being registered anyway you may find that some things have changed or you might have a larger deposit at that time that could reduce your LMI.

Best of luck with it.

Thanks Robbie I did ask Aussie& they said no. I have since asked them again as I also found the above info on their website & am waiting to hear. The land we would be purchasing is in an estate ready to build I would assume its registered. I am annoyed of mortgage brokers saying that you can't use fhog yet there are people out there that have done it.

I can hear your pain but I think its a question of just perservering. I've used a few brokers in the past and even if they are from the same company (and even the same office) they are not equal. In fact I'd say some of the larger places tend to be a bit complacent as they get heaps of work and often focus on doing the easy ones rather than having to do a lot of leg work to get a tight one through.

Credit where its due though, if the broker thinks it'll be refused its best they don't lodge the application, so if you do find one that is prepared to submit it question them closely as to why they think it'll work when others think it won't. It'd be better to save for an extra 12 months and get it through first time than have numerous enquiries on your credit file that are likely to raise some questions.

Just an update I spoke with bankwest & they said the same that they will NOT use the fhog as upfront 5% deposit on construction. I can use it as my contribution but not upfront deposit. I still to save need to save 5% upfront costs myself.

I found builders loan australia who claim to be able to use fhog as upfront deposit but I think they are based in QLD, waiting to hear from them.

Maybe rules changed since you went through bankwest ST13.

In NSW there is NO way to use FHOG unless you have been renting for 12months! Even the builders that advertise all you need is $5,000 deposit also require you to be renting. Unfortunatly I am not renting!