Calculate fund to complete

Discussion in 'Loans & Mortgage Brokers' started by Mark, 19th Jul, 2017.

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  1. Mark

    Mark Well-Known Member

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    I need to get pre-approval for a property using LVR 80%. I need to show fund to complete to get the loan. How does the bank calculate it? Use the example of buying a $300k property in QLD
     
  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Approx 25% of purchase price will be the purchase costs - deposit + legals.

    On a 300k purchase you will require 300k x 25% = $75,000
     
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Owner occupied, First home buyer or Investment?

    The attached matrix shows you a detailed breakdown for each of those scenarios. It does not include the 20% deposit, so you'll need to take the "Estimated Total Costs" and add $60k to that figure.

    In summary:

    First home buyer: $62,220
    Owner occupier (not FHB): $65,220
    Investor: $71,145

    There are some assumptions in this. You probably want to have another $3k on top of that to cover additional settlement costs.
     

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  4. Mark

    Mark Well-Known Member

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    Thanks, Peter. I am buying an investment property. Does the bank do the Fund to Complete calcs as you do? I will have additional money available for completing the transaction after one or two months, but the money in the bank accounts at the moment is only able to cover 20% of the deposit, not other costs.
     
  5. Mark

    Mark Well-Known Member

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    Thanks. It is a good quick estimate.
     
  6. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    The bank would want to see you have the money to complete the deal ie including stamp duty, legals etc.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Stamp duty and government funds are known figures, they're accurate. The rest is estimates, but my figures are fairly reasonable. Add in the 20% deposit and $3k for last minute adjustments and you'll come fairly close to the real figure.

    What Sana & Mona have done is estimate a blanket 5% for this. That also works fairly well and I regularly use this for quick calculations. It doesn't hold up in some states for $1M+ purchases and it's over estimating in many circumstances as well. Thus when determining the final figures, we pump it through the calculator which I used to generate that table.

    The banks do the same calculations and they want to see that you've got the money upfront, or that you've got the savings track record to get you there by settlement.
     
  8. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Keep it simple Mark. There's basically two main aspects.

    - 20% deposit
    - Stamp duty (you can work out stamp duty by using any online calculator)

    You'll also need around $2k - $3k for legal/misc purchase fees.

    Cheers

    Jamie
     
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  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If it is a pre-approval apply for 90% and when you find the property drop the lvr down to 80% if you have enough funds then.

    If it is a full approval the lender probably won't approve the loan unless you can show you are able to complete. Perhaps you could borrow from someone temporarily
     
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  10. Scott No Mates

    Scott No Mates Well-Known Member

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