Simple first home buyer loan/grant question

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JustAllan
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@justallan
Join Date: 2003
Post Count: 168
September 25, 2003 - 2:10 pm
Let’s say you are buying your first home and it’s selling price is $100,000 and you have saved a deposit. You also qualify for the first home buyer’s grant…
Is the “Loan Amount” on the loan application:
1. $100,000
2. $100,000 minus deposit
3. $100,000 minus deposit, minus $7000
?
Allan.
picja1
Member
@picja1
Join Date: 2003
Post Count: 144
September 25, 2003 - 2:35 pm
Depends on how you want to use the FHOG. Generally, it would be;
$100000 minus deposit
FHOG for costs
Surplus from FHOG to do what you want with – pay off the loan, buy a tv, whatever.
However it does also depend on what loan product you are applying for too. For Example if it is a 100% home loan, well loan amount would be $100000 and FHOG for costs.
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JustAllan
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@justallan
Join Date: 2003
Post Count: 168
September 25, 2003 - 3:20 pm
quote:
However it does also depend on what loan product you are applying for too. For Example if it is a 100% home loan, well loan amount would be $100000 and FHOG for costs.
Ok, thanks… I’ve been entering some figures into some online calculators and wasn’t sure what they call the “Loan Amount”. In one calculator, there was no option to enter the FHOG – so wasn’t sure if it would normally count as a deposit. But I guess as you say (and now I’ve read it, it makes sense) that it depends on the loan you take up.
Thank you!
Allan.
Mortgage Hunter
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@mortgage-hunter
Join Date: 2003
Post Count: 3,781
September 25, 2003 - 9:40 pm
Allan,
The FHOG can be used for whatever you want. Doesn’t even have to be spent on the house – it is a payment made either at settlement or afterwards. You can use it for that cruise for your lovely wife if you like!
For a house costing $100 000 you will need to save a min of $5000. This means a 95% lend which is the minimum for most normal loan products.
You need to pay LMI which will be just under $1900, you can use some FHOG for this. You will also need to pay a conveyancer – around $1500 inc all searches and stamp duty (I believe you get some discount here).
Whatever is left of the FHOG is yours. If you use it as additional deposit – say $2000 worth then the LMI will reduce to about $1600 – obviously the higher the deposit the lower the LMI.
If we can get the deposit up to 10% then this gives us an easier loan to get approved as some banks don’t need to approach the mortgage insurers on this figure (Mortgage insurers are the bad guys who knock back loans – everyone blames the banks!).
Hope this helps.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985
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