A 10% deposit is generally the goal for most first home buyers, & is generally the starting point for most banks outside of the First Home Loan. So if we can tick this box, it’s a great start to the journey of buying your first home. However, there are limitations.
So firstly, you will need a registered valuation for the property you intend on buying. This can be difficult for auction properties, as you need the valuation before you can bid, so can costly, with a valuation costing anywhere from ~$700 to ~$1200. If you miss out on a couple of properties on the auction floor, this can add up quickly.
There are also limitations in how & who will give you approval. Some lenders will restrict lending to those without a 20% deposit to their existing customers, meaning you may be limited to what your own bank will approve. You may also face restrictions on pre-approvals, as some lenders at times will only consider ‘live deals’ which is where you have a conditional offer on a home or are looking at a specific auction property.
Certain banks also have restrictions on border income which is a common supporting factor to first home applications, some not allowing any border income, others 1 or 2 borders
You will also have a low equity premium or margin with your lending, which is where lenders will charge either an interest margin on top of the advertised rates, others as a one-off fee. Everyone’s circumstances are of course different, so feel free to get in touch to have a chat about your own journey, it all starts with a conversation!