Browse Forums Home Finance 1 Mar 30, 2009 2:36 am Hi Everyone I just came across this forum in my search for advice on buying my first home and it appears I may be running out of time to make a decision. I'm 28 with a young child who lives with his mother and one court condition I should meet is to have my own residence. I am living in Perth and am looking at applying for 285 - 320k. I have some savings and am currently working. Although on top of the looming recession our company is going through integration, increasing fears of job security. I can only just scrape in to get a loan for these amounts due to child support payments and HECS debit.e I have seen a mortgage broker and spoke to ANZ, who apparently are the only institution who will approve me for that much. My other option is to go with the shared equity scheme where the govt. buys in 20% of the property. The thing with this scheme is that it will make my repayments lower until the govt. deems I can buy back their share however the broker says this scheme is a bit restrictive with high fees. I guess the big worry is loosing my job and I will only have 2 - 3 months to find another source of income. I plan to use either an offset account with ANZ or save the money as with the shared equity they don't offer offset. The ANZ repayments will be higher and the shared equity will be lower so even if I am made redundant I should be able to get a lower paying job and keep making payments. I know that Commonwealth are big noting themselves with 6 month mortgage holidays and maybe other banks will follow suit. Another option is if ANZ allow me to pay of just the interest, re-draw or extend the life of the loan based on what I have paid back but I guess I will have to look into these and fast as the deadline for the first home buyers boost is running out. I could rent out a room to help as well. Looks like I will have to also budget for interest rates increasing in future. The other alternative is to remain where I am and increase my savings and hope for either an extension of the FHOG and/or housing prices to drop. There is a lot of people saying a lot of things so you can't know what to go by. There is the situation in US and UK with housing collapse and interest rates so low but doesn't mean it will apply here as we vary state to state even. Although this is very stressful - worst case scenario I lose everything and perhaps make a profit in selling. Either way I am back at square one with no savings or hope of ever owning a house and my expectation will be lowered. I will make do renting. Any suggestions or tips would be much appreciated thanks Re: Shared equity or bank loan? 2Mar 31, 2009 9:30 pm repeated_love I have seen a mortgage broker and spoke to ANZ, who apparently are the only institution who will approve me for that much. My other option is to go with the shared equity scheme where the govt. buys in 20% of the property. The thing with this scheme is that it will make my repayments lower until the govt. deems I can buy back their share however the broker says this scheme is a bit restrictive with high fees.Any suggestions or tips would be much appreciated thanks Does the Shared Equity Scheme in WA allow you to choose any lender or do they have a nominated lender? We have the Adelaide Bank scheme avaliable in NSW but it hasn't been too popular. Re: Shared equity or bank loan? 3Apr 01, 2009 9:22 pm thlo Does the Shared Equity Scheme in WA allow you to choose any lender or do they have a nominated lender? It s through 1 nominated lender. The current rate is variable 5.24% can't be looked in ad you must pay off the governments 20% ownership stake if switching to another lender. You can pay off th loan quicker for free and the i no mortgage insurance or monthly account fees. Pretty much it allows people to get into the market at lower repayments and then when able to re-pay the banks share. What is unpopular with the NSW scheme ? Yes I am weary of government schemes now. For them it's win win because if you default they get first dibs on purchasing the property at their valued rate minus any agreed improvements you have undergone to the property. Re: Shared equity or bank loan? 4Apr 01, 2009 10:50 pm repeated_love thlo Does the Shared Equity Scheme in WA allow you to choose any lender or do they have a nominated lender? It s through 1 nominated lender. The current rate is variable 5.24% can't be looked in ad you must pay off the governments 20% ownership stake if switching to another lender. You can pay off th loan quicker for free and the i no mortgage insurance or monthly account fees. Pretty much it allows people to get into the market at lower repayments and then when able to re-pay the banks share. What is unpopular with the NSW scheme ? Yes I am weary of government schemes now. For them it's win win because if you default they get first dibs on purchasing the property at their valued rate minus any agreed improvements you have undergone to the property. In the scheme we have here it's actually not the government but an investment firm that has the equity. A few people who were interested suddenly lost interest when they found out about the details. They felt it was inappropriate for another entity having a right to their home and their potential capital gain. I suppose they couldn't get used to the idea. Re: Shared equity or bank loan? 5Apr 02, 2009 8:50 am Is this similar to the HomeStart loans in SA ?? I think these have taken off fairly well, scheme been going for a while,buyer of our old house used them, but they are means tested - only for buyers with income below certain point - I don't know what it is Re: Shared equity or bank loan? 6Apr 02, 2009 12:41 pm Helyn Is this similar to the HomeStart loans in SA ?? I think these have taken off fairly well, scheme been going for a while,buyer of our old house used them, but they are means tested - only for buyers with income below certain point - I don't know what it is I don't know anything about HomeStart in SA. Is that using a government backed lender like the old NSW HomeFund? Re: Shared equity or bank loan? 8Apr 03, 2009 2:18 pm Applicants go direct to the trust or through a selection of lenders? Re: Shared equity or bank loan? 9Apr 03, 2009 9:16 pm Similar to Homestart ours is called Keystart but it isn't means tested. It lets the government buy in 20% of a property so it is good in that sense that you can have a house at 20% less and then the government reviews your budget and you have to pay of their share bit by bit. Trying to find cons to this scheme the broker said it is only variable rate which can't be locked in and the whole scheme is a bit restrictive. Re: Shared equity or bank loan? 10Apr 03, 2009 10:03 pm Bit restrictive maybe but for some it's the only option to buy. Gives long term renters an option into the market, a chance to have a go. Families with stay at home Mum's, single parents etc, who can not sustain a mortgage on their own. It provides an option when there previously was none. Not for everyone sure but a lifeline for ownership for others. my two cents... Re: Shared equity or bank loan? 11Apr 03, 2009 10:31 pm thlo Applicants go direct to the trust or through a selection of lenders? Home Start is the lender, they go direct thru them or I think Housing Trust tenants can go thru the Housing Trust to buy their rental property thru them but you don't have to be a Housing Trust tenant to qualify,and you can buy a house on the open market (for example, my previous home) just to have a household income below x amount, you can even have owned a home before but I think not at the time of applying- (so, people who had to sell as part of a divorce property settlement, for example) I guess they must be underwritten by a bank but conditions are set by the govt, but, no, you dont go thru any other lender. I hope this is helpful, sorry, not really sure of the details, have never used them myself, wouldn't fit the criteria. Re: Shared equity or bank loan? 12Apr 04, 2009 2:25 pm My opinion is that these shared equity schemes don't work for most people as there are other ways to reduce your repayments in the short term such as interest only repayments or you could try to get a housemate to reduce the burden. Of course if you are in an area where prices are unlikely to increase in the near future then you can consider it as a short term strategy and just refinance to a normal loan in a couple of years time. I'm not familiar with Keystarts shared equity scheme as they don't operate here in NSW so you should check with your broker to make sure they don't have any expensive exit fees. If you are worried about job security then either don't buy or consider getting some form of income protection insurance. The media loves to blame banks and rate rises for people defaulting on their loans however the reality is that even last year the #1 cause of defaults was because of loss of income for one reason or another. Nobody knows what the next year will bring so be a little more conservative, buy a cheaper place you can afford and get insurance to make sure you are protected. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 20005 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 12315 Hi, I live in a single storey semi-detached house with a shared wall. All is well until my neighbour’s kid started piano lessons (using an upright piano) and the noise… 0 14615 |