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Who is this article for?
This article is for members of the Australian Army looking to purchase their first home to live in.
Can serving members of the Australian Army get a home loan with no genuine savings?
Yes, by taking advantage of the First Home Owners Grant (FHOG) and the Home Purchase Assistance Scheme (HPAS).
How much can I buy for using the FHOG and HPAS as my deposit?
In NSW and QLD first home buyers do not pay stamp duty for purchases up to $500,000. As there is no stamp duty payable, by using the $7000 FHOG and $16,949 HPAS only, the maximum purchase price without using any of your own funds would be $340,000. The HPAS and FHOG is sufficient at this purchase price to pay for the 5% deposit, legals and purchasing costs. Of course if you do have some savings or access to a gift then this purchase price could be higher providing your income is sufficient to afford the repayments.
What is the criteria to get an Australian Army Home Loan approved without genuine savings?
1) Minimum 1 year employment with Australian Army,
2) Clean credit history – absolutely no defaults or bankruptcies,
3) Positive asset position. Positive asset position refers to having more assets than liabilities. Assets for this test exclude superannuation and home contents.
4) Sufficient income taking into account existing liabilities to afford the repayments if interest rates where to rise by 1.5%
5) Perfect repayment history in the previous 6 months on all liabilities including credit cards and personal loans
Is the interest rate higher?
No, the interest rate is standard – you are not being charged higher because you do not have genuine savings.