Browse Forums Home Finance 1 Mar 17, 2009 12:51 am With the current wave of LVR (Loan to Value Ratio) restrictions hitting home loan borrowers in 2009, Aussie home buyers and builders are now having to save more deposit over 3 consecutive months, ask parents for financial contribution and/or ask for their Guarantee, or try their luck with a No Deposit home loan.
Guarantees are either in the common form of Equity (letting you use part of their equity in their home so you have no deposit) and/or Servicing (parents guaranteeing that you will repay the loan). What % was your deposit, or what LVR was your loan when you were buying or building your home before adding the Lenders Mortgage Insurance? How do you (or rather your parents) feel about guarantees? Re: How Much Deposit for Your Home Loan? 2Mar 17, 2009 10:14 am I don't understand how to work out the percentages but we bought a house/land package and we had to pay $2000 deposit for the land, rest payable when it titled , refundable if we chose not to go ahead with house build - and then $2000 when we signed the house contract, rest payable in progressive payments as construction occurred. We paid these deposits out of our own money.
ie deposits to the builder, is that the question? or deposit to the bank (or in our case, credit union)? which we paid nothing but they held the mortgage to our previous house which was used as equity. Did not have to pay LMI. Obviously we didnt need our parents assistance but am wondering how I would feel about that if my children wanted same from me. Our son bought a unit last year, we sold it to him, was a unit we had held for 6 years as an investment property. He got FHOG but did not have any deposit of his own. He had a full time job and no debts so ability to meet repayments was not an issue for a property in lower price range. I guess our way of assisting him was to sell the property at a discounted price - probably 30 - 40k below market value. Because of this (ie 'instant equity') he did not need LMI or any further guarantee. Re: How Much Deposit for Your Home Loan? 3Mar 17, 2009 10:21 am I was very lucky as I was able to use my FHOG as my deposit so didn't need any of my own money.
I have thought about asking my parents to go guarantor for me, but I couldn't do it to them and I wouldn't like doing it for anyone either. I have never had any issues paying things back, but if anything ever did happen I wouldn't like to drag my parents into my financial problems if that ever happened. Re: How Much Deposit for Your Home Loan? 4Mar 17, 2009 10:58 am 42k deposit so about 13% of total loan.. but had LVR of under 80% so didn't pay mortgage insurance. How much deposit do you need for a home loan? 5Mar 17, 2009 11:05 am wakeboardandy 42k deposit so about 13% of total loan.. but had LVR of under 80% so didn't pay mortgage insurance. Is that because you used the First Home Owners Grant for the building portion? Re: How Much Deposit for Your Home Loan? 6Mar 17, 2009 11:44 am no because I used one of my parents investment properties as security to avoid the mortgage insurance. Re: How Much Deposit for Your Home Loan? 7Mar 17, 2009 12:08 pm No FHOG here, this is our 5th house.
We borrowed 100% against our existing property and assets to buy land and build. However we were a low doc 60% LVR loan and we just made it. Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: How Much Deposit for Your Home Loan? 8Mar 17, 2009 4:27 pm OK, so it seems there is equity there to use when building, either from parents or other property as cross collateral. Re: How Much Deposit for Your Home Loan? 9Mar 17, 2009 5:17 pm We had a 5% deposit - could have gone more but decided not too as we didnt 'budget' for the wedding and just went with things we loved and thought were reasonably priced. So we're keeping money as a back-up for any extra costs we have forgotten about or add in the next few weeks
With LMI our loan is 97% Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: How Much Deposit for Your Home Loan? 10Mar 17, 2009 5:57 pm As a parent of young kids, I fully expect to provide a guarantee for my kids to get into a house in 15 - 20 years time. Probably something that my parents and the parents of my contemporaries never had to consider. Re: How Much Deposit for Your Home Loan? 11Mar 18, 2009 12:54 am Bam We had a 5% deposit - could have gone more but decided not too as we didnt 'budget' for the wedding and just went with things we loved and thought were reasonably priced. So we're keeping money as a back-up for any extra costs we have forgotten about or add in the next few weeks With LMI our loan is 97% Lucky you Bam! If you left it too late to change brokers and decided to go with CBA later, the new 3% deposit saved over 3 months rule would have applied to you. Good timing. Re: How Much Deposit for Your Home Loan? 12Mar 18, 2009 7:53 am We had pre-approval for a certain amount, so bought land and decided on a house plan that was well within that amount.
When we went back to the broker for the final approval our circumstances had changed. I had a third child. The broker came back and said we where now $50,000 short. They would only lend us up to a certain amount because we now had 3 children. So we are calling him the $50,000 baby. We went to another bank, who said they could lend us the amount we needed, but that it would be a 95% loan so we would have to pay the insurance and other bits and pieces, so we are borrowing $50,000 from my parents so that we only have a 80% loan. They want it back when they retire in 5 years, so in 5 years we are going to re-finance. Re: How Much Deposit for Your Home Loan? 13Mar 18, 2009 8:31 am Yep, 5% deposit for us plus we paid our LMI upfront as well as the stamp duty, etc. The only silver lining in having to wait for land registration for us was that we could save up for all the extra 'establishment' costs and, thus, avoid having to capitalise them into our loan.
No grants and/or concessions for us as I owned a property (for a short time) over 20 years ago when there was no help available. This seems a little unfair as my wife who has worked and paid taxes for over 25 years get nothing while 'some' who have contributed little or no tax receive the lot - end of whinge! 'We make a living by what we get, but we make a life by what we give.' - Winston Churchill Re: How Much Deposit for Your Home Loan? 14Mar 18, 2009 1:59 pm I'm pretty sure ours is 97%. Which isn't on your list.. Building with PD - Regent 23 Cascades on Clyde Estate HomeOne Building Thread - PCI Completed - 28th August. Handover - 11th September. Re: How Much Deposit for Your Home Loan? 15Mar 18, 2009 10:44 pm It seems that the 'Lender Mortgage Insurance' will cost us an arm and leg. Are there any other ways of avoiding it ?
I mean I could borrow some money from the in-laws to make up the 20% deposit. Once I get the loan, I could withdraw the money and give it back to the in-laws Does that logic sound right ? Or am I missing something ? I'll be saving almost $6K if I'm able to do that. Re: How Much Deposit for Your Home Loan? 17Mar 20, 2009 9:49 am erinleigh I'm pretty sure ours is 97%. Which isn't on your list.. Hi erinleigh, 97% is actually either a 100% or a 95% home loan in most cases. Let me explain; if you borrow 97% and add the mortgage insurance to it, the loan becomes 100% or very close to it. If you borrow 95% and add the mortgage insurance to it, maximum they will allow is 97%. Re: How Much Deposit for Your Home Loan? 18Mar 20, 2009 10:00 am We borrowed 95% on our land but didn't need it all so we just paid it straight off the principle when we recieved the leftover so our loan is sitting just under 90%. We are now getting a second loan for the construction of the house and borrowing 95% on that but we won't need it. Good thing is we have gained about 20k in equity on the land since we bought it! 2nd build here we come in Whittlesea! https://forum.homeone.com.au/viewtopic.php?f=31&t=92617 1st Build - Henley - Cooper in Doreen! (2009) https://forum.homeone.com.au/viewtopic.php?f=31&t=17354 Re: How Much Deposit for Your Home Loan? 19Mar 20, 2009 10:10 am iTalk It seems that the 'Lender Mortgage Insurance' will cost us an arm and leg. Are there any other ways of avoiding it ? I mean I could borrow some money from the in-laws to make up the 20% deposit. Once I get the loan, I could withdraw the money and give it back to the in-laws Does that logic sound right ? Or am I missing something ? I'll be saving almost $6K if I'm able to do that. You are certainly creative! You won't beat LMi unless you have equity in a cross collateral property (eg. be nice to your parents, aunty, grandma ) or 15 or 20% deposit (depends on lender). The problem with your suggestion is that, you can't withdraw the money from your home loan just like that. You can apply for an increase but they will not allow that immediately after settlement and will never allow you to increase your loan to anything above 95% of the value (and that's if you are lucky). I hope that helps. Re: How Much Deposit for Your Home Loan? 20Mar 20, 2009 10:31 am Thanks thlo, that makes lots of sense.
I'm paying a mortgage insurance of $2.5 for the land only. I could afford 20% for the house-building loan (including the FHOG), will I be charged for the LMI ? The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19097 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35326 In NSW the maximum deposit for building work is 5% until the builder provides HBCF insurance 1 4821 |