can this really be true for buying without a deposit.

Discussion in 'Loans & Mortgage Brokers' started by justine77, 18th May, 2017.

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  1. tobe

    tobe Well-Known Member

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    It's a good niche for a broker working with a builder, selling packages up to around $350k or so. As long as the customer rents, they can get into a new home with $1,000 down, maybe $3-5,000 out of pocket using the fhog for the rest of the deposit. It's just a matter of teeing up the land to take just a holding deposit till settlement and having the builder hold off invoicing their 5% deposit until the slabs poured.

    Trouble is most lenders might account for the fhog in their assessment, but their settlement teams won't release the fhog when the client needs it at land settlement. Which is awkward.
    There are a couple of lenders that will, but even most of that lenders staff don't know about it.
     
  2. LifesGood

    LifesGood Well-Known Member

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    Here in WA it's common practice for developers to give 90 days for finance and builders don't take first progress payment until slab down, so those items are covered thankfully.

    Beyond Bank and Rams have been good for these type of deals, but you gotta wonder what people on decent incomes are going to be like with a mortgage if they can't even save a small deposit!
     
  3. miximitosis

    miximitosis Well-Known Member

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    Westpac and St George can release FHOG at land settlement.

    They were the lenders of choice (especially when they went to 97%LVR) for the exact FHB house and land packages you speak of.
     
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  4. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Rent paid indicates capacity to repay a regular commitment and if paid on time every time it indicates good character. Often its not hugely different to the mortgage payment if its a family applying...

    You still need the $ to fund your part of the deposit / contribution. This could be from FHOG or any other source of funds not held for 3 months such as gifts, tax refunds, inheritances, sale of cars etc etc. As to borrowing these funds I wont go there normally as if that is required usually it will fall down somewhere else like credit score or account conduct. The one exception would be a recent divorcee with high income.

    CBA policy below (westpac and others that have similar policy are a bit more strict as they want 6 or 12 months history).
    • Where Rent Payments are to be considered (where 5% genuine savings is held for less than 3 months) – letter from the Licensed Property Manager / Agent detailing current, full tenancy details, address, rent paid per cycle along with confirmation of 3 months satisfactory rental payment history.
     
  5. tobe

    tobe Well-Known Member

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    Indeed. Cba were better, lending 100% releasing fhog as a streamline overdraft at land. They forgot to repay their overdraft with the fhog and got into a little trouble. No more overdrafts.

    Auswide are the only lender still doing 95+ and releasing fhog as far as I know.