Browse Forums Home Finance 1 Dec 20, 2010 1:12 pm Morning Everyone, My partner and myself are looking at building out first home and just need a little bit of advise on finance. We currently both work permanent full-time jobs. I earn around $50,000p/a and he is on $38,000. We have savings of $28,000 and will be eligible for the FHOG of $7000. The house and land I am looking at, at the moment is around $440,000. I love the plan and the area has great re-sale. Money would be a bit tight though. I have heard of people paying both wages into a loan, using a credit card for the monthly expenses and then using the re-draw facility on the loan to pay the credit card off at the end of each month. Could this work? We are both quite good with money and sticking to a budget. (Although we did have a little blow out at X-Mas this year) Any advise would be greatly appreciated. Thanks Shanii Re: First Home Buyers Finance Advice 2Dec 20, 2010 1:27 pm Hey Shanii, Welcome to the forum. This is pretty much what myself and HTB do. We also have an offset account linked to our homeloan and a 5 year interest only period attached if we wanted to change it to an investment property later on. The only thing is, you only have about a 12% deposit including your FHOG. How much is your land? You will need to pay stamp duty on that and also LMI as your deposit isn't over 20% Re: First Home Buyers Finance Advice 3Dec 20, 2010 2:16 pm Thanks for the reply Flagstaff. The land itself is only $167,500. And thinking about it the $440,000 was before we cut back on a few of the upgrades... I believe it is more like $430,000 - including site costs. Might have to look at cutting back a few other things as well. I thought that in WA we could also apply for the First Home Owner Rate for a concession on the Stamp Duty as well? Who would have thought building a house was so much stress... Re: First Home Buyers Finance Advice 4Dec 24, 2010 5:10 pm We find using a 100% offset account is usually better than a line of credit style loan. The reason being is that with a line of credit you don't need to actually pay off the loan, so many people end up spending all of their available redraw and don't make any progress. With an offset account this is not a problem, however you receive the same benefits. Re: First Home Buyers Finance Advice 5Dec 24, 2010 5:58 pm You have a deposit of about 8% so you will have to pay Mortgage Insurance. This will make it harder as there are only 2 (I think) Mortgage Insurers at the moment and they are very careful after the GFC. But not impossible. The second thing is your ability to make repayments. As a rough guide for you with your combined wages allow about one third tax, one third living expenses and one third mortgage. Here a Line of Credit loan (as you described) maybe the way to go as you are only tied in to paying the interest only (IO) and not principle and interest (P and I) which is obviously more. If you have no credit rating the bank may insist on a P and I loan, then I think $440,000 will be to much. On an IO loan (ie Line of Credit) you might be ok for the $440,000. Best advice is get a very good mortgage broker. Building an Eden Brae Saville 27 http://karry327.blogspot.com/ Building thread https://forum.homeone.com.au/viewtopic.php?f=31&t=44247 Re: First Home Buyers Finance Advice 6Dec 26, 2010 9:43 pm That sounds like an over priced house on cheap land. I'm in Perth too. Our house, land, stamp duty(our 2nd property and for land only) and mortage insurance I'm sure has come to about $440k. And on your incomes I wouldnt be loaning that much, try to keep under $400k, but if that land is only $167k you could easily get it all under $370k. you were just referred to get advice from your solicitor. This is a legal matter. Separately, why would you use a buyers agent for a house and land package? 3 42854 Thanks NativeZen! I can't wait to start landscaping, though it's going to be a while away yet. No movement on site yet as of the weekend. Hoping to see some earthworks… 3 2163 Versaloc is a mortarless besser block system that still needs a properly engineered footing. If you just do a 400x200 footing it will fail in time. At 17m long you need it… 1 3479 |