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FIRST HOME BUYERS GET STARTED WITH JUST $3000 OWN YOUR OWN HOME FROM JUST $275 P/W

Discussion in 'General Property Chat' started by Matt2503, 18th Sep, 2016.

  1. Matt2503

    Matt2503 Member

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  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    I looked into this myself back when I was in WA. A few builders there were 'get started with 3k' crap.

    No bank is going to accept someone with only 3k deposit. You need 5-10%. What they were doing was using a personal loan for the rest of the deposit , keep the proceeds in your bank for 3 months and voila, deposit.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    It's basically a builder that has priced the property to the point where you can get a loan for 97% (inclusive of the LMI). The $3k figure comes from a combination of several things:

    * Stamp duty reductions for first home buyers on a cheap block of land is almost zero.
    * $10k first home buyers grant for new builds will probably take care of the deposit.
    * There might be an 'add back' in the contract which allows them to give some of the required deposit back. Of course they make up for this by charging too much for the property.

    There are some lenders that will actually do this if the application is structured just the right way and they ignore a few little things (actually fairly dodgy). The costs of the loan tend to be significantly higher than what most lenders would do and the property is going to be over priced and ultimately just a cheap property.

    Really though, many people aren't going to be able to qualify for the loan. That doesn't really matter because they can then switch tactics and get a family member to guarantee the loan or motivate them to actually save a real deposit over the 2 years it will take them to title the land. The worst case scenario for the builder is they keep whatever contribution the buyer has and sell it to someone else when the buyer can't settle.

    Realistically this sort of thing is 80% lead generation.
     
    albanga and Perthguy like this.
  4. LifesGood

    LifesGood Home Building & Development Consultant Business Member

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    In WA you can get a 98% Keystart home loan with only 1% needing to be genuine savings (remainder comes from FHOG). It's perfectly doable but there's always strict lending criteria and higher fees/rates.

    The more deposit they can save the better, but then again if timing is critical perhaps getting a "foot in the door" is a better option in the long run.
     
  5. Matt2503

    Matt2503 Member

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    Melbourne
    Thanks peter. This information is very helpful.