What's the best home loan people out. We have no savings as rent is $400 a week. I thought bugger this instead of playing someone's loan off why can't we pay our own. Not sure if I'm going made cause my owners want to sell and I don't want to move.
What's the best home loan people out. We have no savings as rent is $400 a week. I thought bugger this instead of playing someone's loan off why can't we pay our own. Not sure if I'm going made cause my owners want to sell and I don't want to move.
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5 Replies
My advice is to get savings. You can get a no deposit property but they sting you big time with interest and mandatory insurance plus it's usually for the house and land packages with no yard and your neighbours toilet right next to your bedroom. We had $16K plus first home buyers grant on a small $235K mortgage on a country block and it still got chewed up pretty quickly on extras and then the balance as the deposit. It was worth it though, we have a low interest rate, no mortgage insurance and repayments are easy to keep up with even with fluctuations. Whatever you decide, add $100 a fortnight to their minimum repayment and ask yourself if you can still afford it. We pay an extra $130 a fortnight, that is how much it has dropped since we first took out the loan, so if you come in now at the low end of the market you have to be able to cope when interest rates return to normal.
You need savings. AT least 10K I'd say. We had over 50K for a deposit (which we saved on one income with 2 kids - took us five years) and our mortgage is still 300K... repayments on that are $400 a week. PLUS we now pay rates, insurance, water bill. If you're on any kind of family asistance payments - you'll lose all your rent assistance. I worked out it costs us an extra $150 a week to own. Even though our mortgage is the same as your rent. It really isn't. Knuckle down and spend the next few years saving. No new furniture/tvs/cars. Work on paying off ALL extra debt, because they won't even look at you if you have any personal loans. We even had to get rid of our interest free GE loans before could get a mortgage. Talk to a broker. They'll let you know what you need to do to get on track. Of course, it does depend on your income. If by chance you earn over 120K than you might be able to get one with no savings. But you'll pay a tonne in mortgage insurance. Thousands added to your mortgage.
If you don't have savings for a deposit, if you have a family member willing to go guarantor you don't need a deposit. Commonwealth bank are very good, you can do a home seeker application which will tell you exactly what you can borrow so you know where you stand
BUT....I'll add to this post. If by chance, you default on your loan and your guarantors house is worth more than yours, the bank can choose to sell their house instead. Or if you they sell yours, it doesn't cover the full amount owed....you'll both lose your house. Really not a wise choice. Back yourself. Save the money.
My husband and I just bought our first home. It was VERY difficult for us to do because even though after tax we earn about $1800 a week, we both have crap credit historys from when we were 18 and went a bit silly on the credit cards and loans, most of which we never re paid. But we got approved in the end to borrow 95%. On a 8.3% loan. Yes the interest rate is crazy but its better then paying off someone elses mortgage through rent! Good luck.