Buying a house?

[old_mate]

Im in need of some advice

Im a fourth year apprentice aircraft maintenance engineer. An opportunity has presented itself to leave Sydney and head back to Brisbane (im from there originally) and Im wanting to buy my own house. I have my girlfriend coming with me, our combined gross income is around the $90 000 mark

As you can understand, im only 21 and have little idea about this. I have been paying $350 a week rent on ИИИИ wages for the last few years and im jack of it. We have a deposit of around the $15 grand mark not including the first home buyers grant (not sure how it works). I'll be looking hopefully to borrow around the $340 000 mark (less if possible)

ok my questions are (i havent been to talk to the bank yet)

1. I currently have one outstanding personal loan with around $9000 still owing, as well as two GE creditline interest free things. How flexible are the banks with you borrowing a little extra to clear these items?

2. What other upfront expenses can i expect to have to pay? Things like stamp duty, conveyancing etc. I really have no idea

3. What things should i be looking for in a loan, what are things i should avoid? Do many banks do 30 year mortgages?

I plan on going with my companies Staff Credit Union, I'll hopefully be talking with them during the week but i was hoping to get some insight from people on here before going into there looking like a tool

Thanks

[Nino]

Pay out the two interest free cards and the personal loan first. Do not get extra on the house loan to pay for them, the interest will be much more over the life of a house loan.

Cheers Nino

[AC/DC]

Not many people by a house at 21... So go ahead and look like a tool

You are actually very smart, and setting yourself up well for later on in life.

AC/DC

[brenx]

Originally Posted by old_mate

Im in need of some advice

Im a forth year apprentice aircraft maintenance engineer. An opportunity has presented itself to leave Sydney and head back to Brisbane (im from there originally) and Im wanting to buy my own house. I have my girlfriend coming with me, our combined gross income is around the $90 000 mark

As you can understand, im only 21 and have little idea about this. I have been paying $350 a week rent on ИИИИ wages for the last few years and im jack of it. We have a deposit of around the $15 grand mark not including the first home buyers grant (not sure how it works). I'll be looking hopefully to borrow around the $340 000 mark (less if possible)

ok my questions are (i havent been to talk to the bank yet)

1. I currently have one outstanding personal loan with around $9000 still owing, as well as two GE creditline interest free things. How flexible are the banks with you borrowing a little extra to clear these items?

pay off GE immediately. Otherwise very few will consider it.

2. What other upfront expenses can i expect to have to pay? Things like stamp duty, conveyancing etc. I really have no idea

GST, stamp duty and conveyencing fees.

3. What things should i be looking for in a loan, what are things i should avoid? Do many banks do 30 year mortgages?

I plan on going with my companies Staff Credit Union, I'll hopefully be talking with them during the week but i was hoping to get some insight from people on here before going into there looking like a tool

Thanks

All do 30 year loans or any term you want really. I've had a 10 year mortgage on my last house. The shorter the term the more you pay per month. Some banks will give a discounted interest rate if your borrowing a substaincial amount. Make sure you check out what the monthly fees are on the loan and the bank acount you'll be using.

I bought my 1st house @ 22 if memory serves me right. Just make sure you don't make the minimum payment. Pay extra as it'll save you in the end.

[opto]

Firstly, I am not a Home loan salesman, bank or finance person, I would recommend you clear all your debts then you will find what your real savings are, this means you will have some more saving to do, like buisness, do not over capitalise, the more up front the better, you could be up for somewhere between $5000.00 to $8000.00 for conveyancing fees and stamp duty, depends on your states fee structure, you should be eligable for First homeowners Government home grant, you may want to take a loan out for less than you are asking for, it will be relative to what you both earn, this means both your names go on the loan.

Not trying to burst your lovely couple bubble but, sometimes relationships do breakup then it gets messy sorting out what to do with the house like sell, buy her out , she buys you out Etc, this costs too.

If I were you I would pay up debts and do not get anymore, live in a caravan for a year or two and save hard, your relationship will be tested also, make sacrifices.

Remember if your GF falls pregnant, which may or maynot happen, it will impact on your savings.

Reality sux,but if you make it thru, you can call yourself "homeowner" one day, up until then the bank owns you and your house.

I hope this helps, I know it sounds harsh, I make no apology for this as it could be to your benefit.

I wish you the best of luck.

Twice a homeowner first at age of 19 and 37, 2 different partners

[old_mate]

Problem is, I'll probably be moving back within the next 6 weeks, I can't forsee being able to pay off my debts in that time. I could go back to renting up there but its throwing away money again and i am rather impatient. Plus the market is reasonable at the moment.

Thanks for all the advice so far, keep it coming

[Scott]

Originally Posted by old_mate

Problem is, I'll probably be moving back within the next 6 weeks, I can't forsee being able to pay off my debts in that time. I could go back to renting up there but its throwing away money again and i am rather impatient. Plus the market is reasonable at the moment.

Thanks for all the advice so far, keep it coming

old_mate, don't get too caught up in the "rent is throwing money away" thing. Whilst the housing market is in negative or flat growth (as it is most places in Aust now), you are probably better of renting. Whilst prices are not moving forward and you are not looking for tax benefits (ie - this will be your primary residence) you will be spending 500/wk on a loan of $323k (assuming $17k deposit) and you could otherwise be renting for around $300/wk in a reasonable place. Saving of $200/wk or $10k for the year and by the time the market looks like positive growth again you will be in a much better position to do something if you save your pennies.

Don't forget that when you move you'll need to be in your next job for a min of 6 month's before they'll look at you and at the moment it seems you will be a long way short of the $30k or so you'll need to do it anyway.

My suggestion would be to find a rental as cheap as you are prepared to go, start a regular communication with your Bank Manager (trust me it's worth it) and ask him to give you clear goals to achieve by a date that is reasonable to suit your grand plan. Save your $$, by the time you're 30 you'll be in a much better position than most, it's great to see a young fella asking for advice rather than jumping the gun too!

I'm not a financial planner or an accountant or anyone you should wholly rely on to determine your financial future!!

ps - pay off those other debt's with priority.

[Dark Horse]

As well as stamp duty, etc things like pest and building inspections. Pay any outstanding debts off as soon as you can.

Generally try and build up a bit of a deposit as well, try not to go with say a minimal amount for a loan. The more you have upfront the less you have to pay in interest in the end.

If you go to http://www.realestate.com.au/cgi-bin...h?a=loan&t=res there are some basic and handy calculators that will also give you a rough idea of what your borrowing capacity is and also repayments.

You can always approach QF Staff Credit Union and go for an "approved loan in principle" - basically gives you an idea of how much they'll lend you, what your repayments will be etc etc without actually committing to a loan.

Talk to your accountant as well.

[Outbackjack]

Pay off all of your debts..... Borrow mortgage money with a clean slate. Dont be in a hurry to buy as the Australian housing market is still falling. I would look at being ready to buy in 12 months or so with absolutetly no debts. The Brisbane market at the moment represents better value for money at the moment than most other main centres. In another year or so this may be even better...... Good luck.

[brenx]

Mortgages are like car insurance. You have to shop around for the right deal.

To give you some idea of how weird banks are. I have a mortgage with ANZ of just under $300k. I'm selling my house. I approached them to ask, when I sell, I'd like to make sure they'll approve a $180-200k loan. Apparently I can maintain a $300k loan on my wages but I can't maintain a $180-200k loan. Go figure! As I said shop around ;)

[blue fairy]

I purchased my home at age 20 with my now husband.

Seriously, go and speak with a bank or repulatble morgatge lender. They will tell you how much you can borrow with your current loans and you may be able to borrow $340k.

However, If they don't approve you for such a large amount, they many approve you for something smaller and you may need to look into the type of house you want to buy or reconsider suburbs and move further out from the City.

Good Luck.

[Pies1]

Your a game person discussing your personal financial situation in a public forum like this!

Buying a house at 21 would be an excellent move for anyone.

Cant your parents or relatives provide advice, I would never share this sought of information in a forum with people i dont know.

[Ultimate]

I thought banks require a 10% deposit

[apolloxbgt]

Originally Posted by Ultimate

I thought banks require a 10% deposit

Mabey back in the 60's,banks are 5%,or 20% if you want a rural loan.

Wow 340k for a first home,I bought my place 4 years ago at 21 for.........130k,and that was 30 more than I wanted to spend!

[gtfpv]

contact members equity . no fees . also you can take a loan out over 30 years get advice from them . owner occupiers and investment loans are the same int . rate .you maybe able to switch between them if you decide to move back to sydney . you can rent the house out without loan penalties . talk to them . their interest rates are one of the best in the country .

[gtfpv]

also consider buying a house for yourself . and perhaps renting it out , and then renting yourself . for a young person the advantages may be much better . you get to have a cake and eat it too. with great tax advantages . i'm not a financial advisor . but look into this one .it may well be the way to go.

[old_mate]

Thanks for all the advice here people

Gives me heaps to think about thats for sure

[Penelope Pitstop]

I worked in the banking industry for a number of years and have also been a home owner for many years.

You do not have to clear you debts in order to take out a home loan... although you would be better off. You can consolidate all your debt at the time of taking out the loan although it can effect how much they are willing to lend you.

Talk to your bank... sit down and discuss your options.... you are in a pretty healthy position and I would say from my experience that you should have no trouble in achieving this.

Stamp Duty is pretty hefty and so are inspections etc, establishment fees... the list is endless - budget around $5-10K for misc expenses and whatever is left you can spend on personalising the house.

For now if I were you I would be jumping on the bank websites and playing with their calculators working out an estimate of what you can borrow and then have a look on real estate sites and see how things will look.

Good Luck - Sure is exciting times.

Cheers, Tori

[Gambit]

Originally Posted by Penelope Pitstop

Stamp Duty is pretty hefty and so are inspections etc, establishment fees... the list is endless - budget around $5-10K for misc expenses and whatever is left you can spend on personalising the house.

Cheers, Tori

Not sure in Qld but we have just bought a house in Nsw & for a first home buyer those fee's & stamp duty were waived.

[TURBOTAXI]

Find a good broker and take the nike approach.

First one is hardest.

[Yummy Mummy]

Qld market is good to get into at the moment. It is experiencing good growth, but hasn't quite peaked so it is highly likely that you will make good capital growth.
In QLD stamp duty is quite low. A $300k purchase will see you paying only around $3k in stamp duty as opposed to $19k in Victoria. You will pay stamp duty on your mortgage as well, establishment fee (which should be negotiated), valuation fee (around $275), conveyancing costs (around $400).

Clear your debts is your capacity to repay your mortgage is tight. That way you won't be left short if things go wrong. Your borrowing capacity will also be higher without any other debts. It is usually difficult to include other debts in your borrowed funds for a purchase, unless you have a substantial deposit, as your LVR (loan to value ratio) is usually quite high for a first home buyer.

PM me if you need any advice. I work as a mortgage originator, do this every day, so I can help if you need.

[Martyvan]

Originally Posted by Yummy Mummy

Qld market is good to get into at the moment. It is experiencing good growth, but hasn't quite peaked so it is highly likely that you will make good capital growth.

I have had my place for 5 years, Value has slightly more than tripled in that time. That covers off the renovations Im about to undertake (cheaper to Reno than move!). BUT, I would suggest the market in MOST places of Brisbane is fairly FLAT at the moment or in a slight decline. Houses are going for $30k - $40k under valuation. From friends' experiences. EG $400k house, sold for $345k, That was one of my best mates too. 11km North of Brisbane is flatter than ever at the moment. Its definitely a buyers market at the moment.

OLD_MATE: Look for a house which is under your price range, and throw in an offer a LOT ($20k?) Less than what it was listed for. Have a number of houses on the go at the same time. Set your max budget, and dont go over it. Thats where people get into trouble. As for Finance, if you cant make a decision on what features you need in a home loan, get a loan which has the lowest interest rate, and has a 'get out of jail free' section of the contract, which basically means you can refinance 12-24 months down the track without paying exit fees, when you know what you need from a loan, Do you need a package with Platinum credit cards, and other stuff, or do you just want the lowest interest rate you can get...

Sorry for waffling on......

[Scott]

All the hunting I've been doing around Brisbane & GC show that the market has peaked and is flat at best in most suburbs.

[Yummy Mummy]

http://www.brisbane-australia.com/106030.php

Good article on Qld real estate growth predictions for 2006.