Browse Forums Home Finance 1 Aug 09, 2009 10:11 pm Hi there, I'm a first home buyer looking to purchase in the next couple of months, I've been doing a lot of reading on the internet, talking to people etc. and think I understand most of the steps involved in buying a home. However I'm still a bit unclear on the deposit when contract is exchanged. For example a 10% deposit is required when the contract is signed, I have 25% deposit saved and borrowing the rest from the bank. If I give the vendor/agent 10% deposit when I sign the contract where does my other 15% deposit come in? Do I hand it over at settlement with the balance fund from the bank? Sorry for the seemingly stupid question. Cheers, Eric Re: Newbie deposit question 2Aug 09, 2009 10:35 pm you give the agent as little money as possible as a deposit. any pay the rest on settlement. dont forget about stamp duty, in sa on a $300,000 purchase price the stamp duty/fees are approx $14,000. Re: Newbie deposit question 3Aug 10, 2009 12:11 pm Instead of 10% deposit upon signing, another option, which we did, might be to pay a minimal amount of about $1500 plus provide a letter of guarantee from the bank stating they will definitely be financing the contract. Renovating a post-war house in Brisbane | On the first rung of the property ladder Re: Newbie deposit question 4Aug 10, 2009 8:36 pm Thanks guys for the feedback, I don't mind paying 10% deposit on a property I'm sure of, if it gives me a slighter edge (if any), just wasn't sure when and how I'd give the rest in cash. From what I've gathered if I pay 10% deposit upon signing I make up the rest in cash + loan on settlement? I've factored in stamp duty already in my purchase (and the grant i'll be receiving). Thanks, Eirc Re: Newbie deposit question 5Aug 10, 2009 8:42 pm Both times that I have purchased a house, I paid the deposit to the real estate agent, and other private funds a couple of days before settlement to the conveyancer. Both times, the conveyancer required funds in the form of a bank cheque. Re: Newbie deposit question 6Aug 11, 2009 2:30 pm Hi Eric, You should have your solcitor go over the contract to ensure that everything is in order. You would also want to get a builiding & pest inspection completed on the property. Prior to handing over your 10% deposit, you may want to look at a Pre-Approval with the bank to ensure that they will lend you the money. This has helped a lot of our clients. It also gives you comfort that the bank will lend you the remaining funds to complete your purchase. I hope this gives you some further information. Cheers Trent Bartels Residential & Commercial Finance Broker A & B Financial Solutions ...Solutions for your future info@abfinancial.com.au http://www.abfinancial.com.au home loan deposit question 7Aug 12, 2009 12:48 am eric-w Sorry for the seemingly stupid question. Cheers, Eric No question is stupid, Eric. Sent you a PM. Re: Newbie deposit question 8Aug 12, 2009 6:11 pm Thanks again everyone and thlo for your advice. My offer was accepted on Monday and the solicitor went through the contract and vendor statement. Everything was in order with the exception of the subject to lease clause which had to be removed. It was an innocent mistake due to miscommunication between the agent and vendor but it was quickly resolved. The 10% deposit is payable on the finance approval due date in 2 weeks so I think I'll be okay as long as the loan goes through. I was pre-approved prior to the purchase and the bank has commenced processing the loan already so hopefully they don't drag their feet too much. Regards, Eric Re: Newbie deposit question 9Aug 12, 2009 7:05 pm congrats on your new land.... cba had our application for 3 weeks, then informed us they needed to send us more paper work that needed signing. 2 weeks later it was finally sorted good luck Land settlement 4 May Building contracts signed 27 July Slab pour 26 March Frame started 10 May Bricks start 31 May Roof & Gutters Start 31 May gyprock 1 July Kitchen & cabinets/tiling 19 August Second fix plumbing 15 September Second fix electrical 22 September PCI 28 September viewtopic.php?f=31&t=29155 Re: Newbie deposit question 10Aug 21, 2009 12:14 pm building aimlessly congrats on your new land.... cba had our application for 3 weeks, then informed us they needed to send us more paper work that needed signing. 2 weeks later it was finally sorted good luck with a 25% deposit you should be right for a quick turn around time from the bank. Ours went from pre-approval to final approval in 7 business days and mine included the LMI people going over everything as well (You should not have this issue). Jack Re: Newbie deposit question 11Aug 21, 2009 1:13 pm eric-w Thanks again everyone and thlo for your advice. Regards, Eric Eric, be careful when thanking me. elastic doesn't like mortgage broker members PM'ing answers to member questions. elastic They do it in subtle ways then PM you trying to get your business. In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4814 a building inspector should be able to tell you about any major problems but we need a floor plan with dimensions to clarify options for extra bedrooms ... sometime an… 1 8715 thank you! do we need to get this or our builder before we commence new build on the block? 2 10404 |