Most first home buyers in Officer and Pakenham don’t have a full 20 percent deposit, and that’s okay. While a 20 percent deposit avoids Lenders Mortgage Insurance, options exist to purchase with as little as 5 percent.
Deposit Options
A 20 percent deposit on a $600,000 property equates to $120,000 and avoids Lenders Mortgage Insurance entirely. However, the First Home Guarantee allows eligible buyers to purchase with a 5 percent deposit – $30,000 on a $600,000 home – without paying LMI, potentially saving $15,000 to $25,000.
What Else to Budget For
Beyond the deposit, factor in conveyancing ($1,200 to $2,000), building and pest inspections ($500 to $800), and connection costs after settlement. Stamp duty may be nil if the purchase price is under $600,000 and you are eligible.
Total Costs to Settlement
Based on a $600,000 purchase, you should budget approximately $45,000 to $60,000 to cover all costs to settlement.
The honest reality
Two recent rate rises have changed your borrowing capacity. A pre-approval from six months ago is likely outdated. Get an updated pre-approval from your broker to understand your current borrowing power accurately.
Questions to consider
- What is my current borrowing capacity given the recent rate rises?
- Am I eligible for the First Home Guarantee, and what are the specific requirements?
- What are the ongoing costs of home ownership beyond the initial deposit and settlement fees?
Talk to KR Peters for a straight-talking appraisal with no obligation.
krpeters.com.au
Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.