So I'm after advice and tips to get in the best position to buy our own home.
*How much deposit do I need? (Is our rent taken into what we can afford?)
*Tips to reduce our weekly expenses.
*any thing else to help us get out of the renting market and into our own home.
*house I love is $350,000.
1. how deposit do I need?
2. How much for legal fees?
Thank you
7 Replies
Seeing a mortgage broker or making an appointment to see someone at your bank is going to give you the most accurate information.
I suggest seeing a mortgage broker to go over everything in sufficient detail, and have a meeting with a few banks to check out their rates/offers.
We have gone with a variable rate as opposed to fix, it's risky but we don't expect THAT much of a jump in the market to hinder us.
If you are building, you need roughly 5-10% as the first home owners grant can be placed towards your deposit. Waiting until the no stamp duty scheme comes into play will be extra beneficial. 5% if you can get a guarantor, 10% without and having the bank apply for the FHOG on behalf of you.
If you buy an existing home, you will be able to have no stamp duty on a house under the threshold however you won't get the FHOG. Thus, you'd be required to have approximately 20% saved up as a deposit as a minimum.
The biggest and most successful thing we did to help us along was we got a credit card (as we had no way of proving a credit rating) a year before we applied for a loan. We put all bills on this and then 3 weeks later transferred the outstanding amount from our savings. This gave us a decent credit rating and just for an extra push, we took a car out on finance. Being able to prove you can successfully pay back outstanding amounts is a big win for the banks.
We found to reduce our weekly expenses we looked at what we REALLY needed. We invested in a Kodi Box ($50 one off payment) and got rid of Netflix. There was just the two of us, so we cooked with the intention of preparing stuff for the next night. So stir-fries we made extra rice to use for fried rice the next night, spaghetti we used the sauce for baked potatoes the next night and so on.
Please get advice from a broker, you,will not need 20 percent deposit if you buy an existing home and please, please talk,to,a broker before you consider getting debt to help with your credit rating!!
When you take into consideration legals, stamp duty (currently) and fees you will be up for around 20%. 10% for the home, stamp duty, solicitor fees, transfer of land titles, insurance etc. It all adds up - so 20% is a safe figure to say.
I don't think getting a credit card or taking a car on finance is technically debt, as everything is repaid very quickly if done the right way. And that was advice from a broker to do so.
Different poster here:
If you do a quick loan lending calculator you get minus % of each debt you have making your serviceability less.
Depending on what loans your aiming for, credit cards can be really bad! Have a look at a few different banking websites and read their PDS on home loans, most of them will have a savings home calculator too which will show how much your serviceability will drop with each loan payment.
If it's a small home loan under 300k it can affect the loan outcome between 0-$9000 on a credit card that has a $1000 limit.
So 2 ppl, 2 credit cards and $1000 limit on each can affect your lending amount by $18,000! So be careful, each bank has a different percentage, but this is just general advice.
- I was admin and data entry clerk for Aussie home loans.
Also, most brokers will tell you to get rid of credit cards before applying because even if you don't owe anything, they still consider it a liability as you have access to these funds. As I said earlier, please see a professional. Also to the lady with the 20 percent ccalculations above, stamp duty is widely different from state to state, the IM should stick to 5 percent plus her expenses and it also depends if the lender will capitalise the lenders mortgage insurance. Also car finance and credit cards are MOST definitely debt, please don't take advice here, every situation is different, see a broker.
General rule of thumb for your info, deposit wise you will need at least 5 percent the value of the home plus expenses (stamp duty, legals). You may be eligible for any first home buyer offers and use that also.