HOW MUCH DO I NEED AS A DEPOSIT, AND WHAT WILL STAMP DUTY AND SET UP COSTS FOR THIS HOME LOAN BE?

WHY DO I NEED A DEPOSIT, DON'T YOU HAVE 100% LOANS? - Yes we have 100% loans and even 105% loans, but these loans cost slightly more for the Mortgage Insurance, and are only available to people who have an absolutely faultless credit record, a good stable employment record, stability of domicile (address) and generally demonstrate good financial management through savings and credit cards with nil or low balances. They may also own other real estate or substantial assets. (Note that since the Sub-Prime credit crisis in the USA lenders aren't as able to offer these high lend loans, so you would be wise to accumulate some funds to put towards your home purchase wherever possible)

If you don't fit that profile, but are still in fair financial shape apart from a few minor points, then we may be able to arrange a 97% loan plus the cost of the Mortgage Insurance is added to the loan up to but not exceeding the equivalent of a 100% loan. That loan becomes effectively as good as a 100% loan. The less financially secure you are, the greater deposit the Lenders and Mortgage Insurers look for.

First home buyers may not be aware of the cost of buying a home. This cost varies from state to state because of State Government stamp duty. I will show you a typical example of costs in a 95% loan on a $350,000 home purchase in Victoria. Costs for other states are listed at the bottom, and the differences between states make a very interesting comparison:-

	Purchase Price	$350,000
	Loan of 95%	$332,500
Costs	Solicitors Fees	$400
	Searches	$350
	Stamp Duty - Victoria	$16,660
	Govt Fees	$1,031
	Typical loan Costs	$1,000
	Total Costs	$19,411
	Deposit 5%	$17,500
	Less First Home Owners Grant	$7,000
	What you need to cover costs & deposit	$29,911

Therefore you would need funds totalling $29,941 which includes $17,691 in government charges. Staggering isn't it.

For the same scenario in other states the government fees and charges at the time of writing (April 2007) are: -

	New South Wales	$158
	Queensland	$2,605
	South Australia	$15,845
	Western Australia	$13,849
	Australian Capital Territory	$12,507
	Northern Territory	$7,476
	Tasmania	$12,350

Each state has some incentives or cost savings, so I suggest that you call your own state body to enquire if there are any reductions available for you.

Phone numbers are: - Victoria 132 161 - New South Wales 02 9689 6200 - Queensland 1300 300 734 - South Australia 08 9226 3750 - Western Australia 08 9262 1100 - Australian Capital Territory 02 6207 0028 - Northern Territory 08 8999 7949 and Tasmania 03 6233 3722.

I hope that this has explained how to calculate what you will need to allow for costs and deposits. Remember that this is a sample and may not represent your scenario. Check all costs with your solicitor or applicable state department. We check all applications to ensure that these costs can be covered.

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