Hey I was wondering if anyone could share some light on these questions I have about getting a home loan, obviously at a later date I will speak to a bank but anyone with advice or experience is appreciated. Sorry for the long post.
My partner and I are currently engaged and saving for our wedding in September next year. So far, saving for that is our main real goal with buying a home after.
I was considering that we get a home instead and still save for our wedding on the side. (it is only $10,000 our wedding). I wanted to know where we stand on eligibility. I know we are eligible for the first home owners grant, in Qld it is $20,000
He works full time and I am on centrelink only as I study. I am nearly finished my degree however and obviously will be getting a job in my chosen field. I was wondering would we still be able to go for a home loan with my income being centrelink only at the moment or will my income be disregarded? I have even thought about getting a casual job to help the application, it is just difficult to maintain a job with my degree so I understand he and I may need to wait until I graduate and start proper full time work.
How long would I need to have held my casual or full time job for?
Also, when my partner was young and naive he had a bill run up in his name but wasn't caused by him (his friend had a phone in my partners name and never paid bill - I know so stupid of him) he has always had the attitude of 'It isn't mine so I am not paying it'. Obviously once we got together and combined finances I stopped that attitude and he now pays it off. Will that debt need to be finished before getting a home loan, has anyone gotten a home loan with bad debt and if so was it paid or unpaid? That is his only default. In my opinion he is too nice to say no and got taken advantage of but that is a lesson he learned lol.
Also with the home owners grant, do we need a deposit?
Thanks
3 Replies
Firstly I'm not sure if you know that first home buyers grant is only for building a new home not just buying a house. You can use the first home buyers as a deposit but you'd need more money than that for a deposit. Usually 10% plus all the extras is usually about another 5 grand (lawyers etc) so if you're looking at building for 400,000 you'll need to save about 25k on top of home buyers grant.
If your partner and yourself earn enough to pay the mortgage (even on Centrelink) you should get a mortgage. But they are pretty strict. Borrowing capacity takes into account if the interest rates rose to 8% or so (which is double that n it is now) just as a sort of contingency, if you're strapped to pay the 4% repayments they won't let you borrow. I'm unsure about the old debt whether it will make More of a difference than just the repayments he makes being taken into account but if they went to debt collectors it's possible.
Fingers crossed for you
All up our total purchase price 5 years ago was $235,000. That was just the land and the new house. We used the FHB grant (then it was $21,000) and we had $20,000 saved. The whole grant went to the deposit and our savings were divvied up to cover , load application fees, legal fees, additional plumbing/electrical/communications work and stamp duty then the balance was added to the grant to form the total house deposit. Initially we tried on our own talking to banks and after the second one (our regular bank that we've both banked with since we were teens) knocked us back we sought the help of a recommended mortgage broker. I'm sure others have success stories for others but we went through a lady that works for Aussie and within 2 weeks she'd organised everything and got us a loan through a local bank so we could get the build going as we'd already picked the builder and the house plans. We were both working but a mortgage broker can talk to you about Centrelink payments being included in income (I'd think they would have to be included but the amount probably wouldn't improve the total income enough to warrant borrowing much more than an application based on the single wage so it really might be worth waiting). On the banks request I closed my Myers card (it wasn't used anyway) and I had to pay out my partners credit card (one of those stupid starts as a store card but is actually a credit card) gone wrong so we could close that one too and at the time of application neither of us had a personal or car loan. If the wedding can wait I'd recommend trying for a bank with a mortgage offset account and using that to hold your wedding savings until needed.
I work on a housing estate - first home owner grant is for newly constructed houses or for houses which have never been lived it. Most lenders require at least a 5% deposit - in some cases the grant can be used in lieu of the deposit - RAMS are great for no deposit loans and can use a good rental history. It's unlikely you will get approved if your partner has a bad debt - if the debt is payed out you can get in contact with an agency who may be able to remove it.