Saturday, July 30, 2011

How Much Deposit Do I Need To Buy A $475,000 Home In Western Australia?

How Much Deposit Do I Need To Buy A $475,000 Home?

Time for my next article, with the how much deposit do I need series, we will look at how much deposit do you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer (buying your second, third home, etc or investment property). We will look at the approx fees and charges too, to give you a guide to how much deposit you need to purchase your next home.

Lets look at how much deposit you need to purchase a $475,000 property in Western Australia, both as a first home buyer, and non first home buyer. We will look at the minimum deposit required, which with most banks or lenders is 5% of the purchase price, plus the associated fees. Of course the more deposit you have the better, and generally speaking your 5% deposit, has to be saved over at least 3 months in a bank account (this is called genuine savings). The deposit can also come the sale of shares, sale of a previous home etc.

Ok, lets look at fees, and the minimum deposit you will need to purchase a $475,000 property in Western Australia (unless you have a guarantor for your home loan, which you may not need a deposit at all) -

First Home Buyers ($475,000 Property).
Property Purchase Price - $475,000
Transfer Stamp Duty - $0
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)

Total including Fees - $479,650 (Including The Fees)

Deposit Required $23,750 (5% of $475,000)

You will need $23,750 deposit, as a first home buyer to purchase a property costing $475,000 in Western Australia.

To work out your how much your home loan would be, as a first home buyer purchasing your home for $475,000 in Western Australia –

Purchase price (including fees) - $479,650
Minus Your Deposit - $23,750
Minus The First Home Owners Grant - $7,000

Home Loan Required $448,900

When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.

Based on purchasing a $475,000 property, with a $448,900 home loan, the mortgage insurance fee would be approximately $14,316 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -

Home Loan $448,900
+
Mortgage Insurance Fee $14,316

Total Home Loan $463,216

Your approx repayments on a $463,216 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,112.96 per month,


Buying Your Next Home Or Investment Property ($475,000 Property).
If you have already purchased a home, or you are buying an investment property, you may not qualify for the first home owners grant. You can still purchase a home with as little as 5% deposit, and you will still require 5% genuine savings (this can come from the proceeds of a sale of property, savings in the bank, sale of shares). The biggest difference is you will have to have the funds to also pay for the transfer stamp duty, settlement agent fees, balance of the shire and water rates.

Also too, please note that if you have equity in your current home, and you are buying another property, you may not need a deposit at all, as the equity in your current home, may be able to be used as deposit to fund your new property. You also may not need a deposit either, when buying your next home, if you have a guarantor for your home loan. If using a guarantor for your home loan, you also may be able to borrow the associated fees, so you may require no deposit at all.

Lets look at how much deposit you will need to purchase a $475,000 property, if you are buying your next home or an investment property in Western Australia –

Property Purchase Price - $475,000
Transfer Stamp Duty - $16,578
Settlement Agent Fee - $1,700 (Approx)
Balance Of Water Shire Rates - $2,000 (Approx)
Mortgage Registration / Legal Fees - $350 (approx)
Bank Application Fee - $600 ( Some mortgages have no application fee)

Total including Fees - $496,228 (Including The Fees)

Deposit Required $23,750 (5% of $475,000)
Plus Fees (as above) $21,228

Total Deposit Required $44,978

You will need $44,978 deposit, as a non first home buyer to purchase a property costing $475,000 in Western Australia.

To work out your how much your home loan would be, as a non first home buyer purchasing your home for $475,000 in Western Australia –

Purchase price (including fees) - $496,228
Minus Your Deposit - $44,978

Home Loan Required - $451,250

When you borrow more than 80% of the property value, you will pay a once off mortgage insurance fee, which with most banks can be added to the home loan.

Based on purchasing a $475,000 property, with a $451,250 home loan, the mortgage insurance fee would be approximately $14,391 (this fee will vary between the lenders). This fee can generally be added to the home loan. The more deposit you have, the cheaper the mortgage insurance fee will be. Lets add the mortgage insurance fee to the home loan and see what your total home loan will be, and the monthly repayments -

Home Loan $451,250
+
Mortgage Insurance Fee $14,391

Total Home Loan $465,641

Your approx repayments on a $465,641 home loan over 30 years, at an average mortgage interest rate of 7.1% is $3,129.26 per month.

This is an approximate guide to how much deposit you will need to purchase a property costing $475,000 in Western Australia. If you are unsure, or would like more advice specific to your own personal situation, please contact me anytime. I am a mortgage broker, based in Yokine, Western Australia, with many years of experience. If you have any comments, please leave below, I enjoy reading your feedback.

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