Browse Forums Home Finance 1 Jun 16, 2013 11:10 am Hello everyone My wife and I are looking to build our first home. We are a little nervous about the whole process and would like the experts here to give us some advice. Our monetary situation 1. We have a combined income of about $100k 2. Savings about $20k (genuine) and $4k as gift 3. 1 dependent 4. 1 car loan with $7800 remaining and no credit cards. Car loan paid on time with additional payments and never missed a payment. Pitfall 1. 1 telecom default for $410 in 2010 due to an address mess up. Paid in full in 2011. Veda Credit report reflects paid status. We are going for a land and house package worth $426k. The broker says the loan will be spilt (land first then construction). Can you please advise if- 1. Will we get finance approval with the paid default on my credit report? 2. If ill be left with a land (and mortgage) if land finance approved and construction is not. Meaning, should I split or not spilt the loan? 3. Broker says we are better off with Westpac professional package with 3 years fixed rate ( for the amount we are borrowing). Is this true? 4. Anything else we should be aware of. Thanks in advance for all your help. Regards The anxious first home buyers Re: Finance - anxious first home buyers 2Jun 16, 2013 3:24 pm Hi yk83, Serviceability wise it seems you are okay, but the credit default will obviously impact your application. Small telco defaults are probably the best ones you can have if there is such a thing and paying it 2 years back is advantageous. But whether it will be approved, especially at 95% is another thing with mainstream lenders. Will be treated on its merits. Note that there are pros and cons to fixing you loan rate. It's mainly used for people who want some certainty in their repayments and are scared of what rate rises will do with their cashflow. Also with your savings you haven't quite hit the 5% genuine and have you taken into account costs such as stamp duty, etc, and contingency costs for unforeseen overruns? Cheers Tom Re: Finance - anxious first home buyers 3Jun 16, 2013 4:12 pm plc Hi yk83, Serviceability wise it seems you are okay, but the credit default will obviously impact your application. Small telco defaults are probably the best ones you can have if there is such a thing and paying it 2 years back is advantageous. But whether it will be approved, especially at 95% is another thing with mainstream lenders. Will be treated on its merits. Note that there are pros and cons to fixing you loan rate. It's mainly used for people who want some certainty in their repayments and are scared of what rate rises will do with their cashflow. Also with your savings you haven't quite hit the 5% genuine and have you taken into account costs such as stamp duty, etc, and contingency costs for unforeseen overruns? Cheers Tom Thanks for the reply Tom. Savings is another reason why broker is splitting the loan. $200K for the land ($10K deposit + $9700 to cover - all fees and stamp duty + $1000 deposit paid to hold the land). Thats $19700 for the land now. Then another $6-7K added to the savings, while going for the construction loan a month later. Does this sound OK? Re: Finance - anxious first home buyers 4Jun 16, 2013 5:53 pm yk83, what state are you in? I assume you've already researched your state on whether it provides a first home buyers grant or stamp duty exemption (which will make you more appealing to the lender) However, a couple of things: 1. Having something like that on your record will probably impact you. I had a $180 default from an Electricity company (My fault, forgot to inform them of new address) and I tried getting a 5k Credit card and I was refused twice. (My situation was also similar to yours, joint income was about 100k, no other debts though but I have 3 dependants..) Also was refused a car loan earlier in 2009. (Come July 7, it's off my record yay!) This $400 debt, you say it's a mix up? Do you know if it was the fault of your own OR the Telco's fault? Because you can actually fight for it to be taken completely OFF your records so it shows nothing - But you can only do so if the Telco agrees that they were at fault (For example, you called up to change your address but they didn't note it etc) Otherwise there are some websites out there where you can actually pay someone to remove it for you - They are pretty clever in that sort of stuff and I doubt you'll have to pay much to them to have them remove a $400 Paid Default - I've got a friend who got rid of his LEGITIMATE paid defaults off his record. (It might cost you about 1k though...) 2. You say you have 20k in legitimate savings and 4k as a present. Why don't you use that 4k for the next 3 months as legitimate savings so it LOOKS like you're saving it? For example, pay about 1250 (plus what you are currently saving) into your savings account - And if you need to pay bills, feed your family etc just use the 4k in cash to do it. (Do you have it in cash or in your bank?) See, there's a ways around showing the bank that these are actually savings. If you're not in any real hurry and it can wait 3 months, best to do that. 3. To be honest, other than the paid default, I can see absolutely no reason why you would not be granted the loan. If you've got a savings history, serviceable income (which you do) and a 5% deposit of $426k, then I really don't know what they can knock you back on. How long have you or your partner been in the same job? If it's 2+ years, then you're laughing there too. Good luck! $395 Fixed Priced Landscape Plans for DA M: 0435 127 244 | W: bluegumdesign.com.au | E: info@bluegumdesign.com.au Residential | Commercial | Industrial Re: Finance - anxious first home buyers 5Jun 16, 2013 9:26 pm Brahma Bull yk83, what state are you in? I assume you've already researched your state on whether it provides a first home buyers grant or stamp duty exemption (which will make you more appealing to the lender) However, a couple of things: 1. Having something like that on your record will probably impact you. I had a $180 default from an Electricity company (My fault, forgot to inform them of new address) and I tried getting a 5k Credit card and I was refused twice. (My situation was also similar to yours, joint income was about 100k, no other debts though but I have 3 dependants..) Also was refused a car loan earlier in 2009. (Come July 7, it's off my record yay!) This $400 debt, you say it's a mix up? Do you know if it was the fault of your own OR the Telco's fault? Because you can actually fight for it to be taken completely OFF your records so it shows nothing - But you can only do so if the Telco agrees that they were at fault (For example, you called up to change your address but they didn't note it etc) Otherwise there are some websites out there where you can actually pay someone to remove it for you - They are pretty clever in that sort of stuff and I doubt you'll have to pay much to them to have them remove a $400 Paid Default - I've got a friend who got rid of his LEGITIMATE paid defaults off his record. (It might cost you about 1k though...) 2. You say you have 20k in legitimate savings and 4k as a present. Why don't you use that 4k for the next 3 months as legitimate savings so it LOOKS like you're saving it? For example, pay about 1250 (plus what you are currently saving) into your savings account - And if you need to pay bills, feed your family etc just use the 4k in cash to do it. (Do you have it in cash or in your bank?) See, there's a ways around showing the bank that these are actually savings. If you're not in any real hurry and it can wait 3 months, best to do that. 3. To be honest, other than the paid default, I can see absolutely no reason why you would not be granted the loan. If you've got a savings history, serviceable income (which you do) and a 5% deposit of $426k, then I really don't know what they can knock you back on. How long have you or your partner been in the same job? If it's 2+ years, then you're laughing there too. Good luck! Thanks for the reply. The $400 was my fault. I didn't care much to update address or forward my mail when I moved. I am looking at those sites and they sound like scam? is it actually possible to remove ur defaults, the paid ones, i mean? Ive been working for 4.5 years now. Im just hoping everything works out. Re: Finance - anxious first home buyers 6Jun 16, 2013 9:51 pm When I get to work tomorrow, I will ask my friend which business he dealt with because he is living proof that the guy he went through wasn't a scam. It seems like everything else is in your favour though. Stable job is critical. $395 Fixed Priced Landscape Plans for DA M: 0435 127 244 | W: bluegumdesign.com.au | E: info@bluegumdesign.com.au Residential | Commercial | Industrial Re: Finance - anxious first home buyers 7Jun 17, 2013 4:44 pm yk83 plc Hi yk83, Serviceability wise it seems you are okay, but the credit default will obviously impact your application. Small telco defaults are probably the best ones you can have if there is such a thing and paying it 2 years back is advantageous. But whether it will be approved, especially at 95% is another thing with mainstream lenders. Will be treated on its merits. Note that there are pros and cons to fixing you loan rate. It's mainly used for people who want some certainty in their repayments and are scared of what rate rises will do with their cashflow. Also with your savings you haven't quite hit the 5% genuine and have you taken into account costs such as stamp duty, etc, and contingency costs for unforeseen overruns? Cheers Tom Thanks for the reply Tom. Savings is another reason why broker is splitting the loan. $200K for the land ($10K deposit + $9700 to cover - all fees and stamp duty + $1000 deposit paid to hold the land). Thats $19700 for the land now. Then another $6-7K added to the savings, while going for the construction loan a month later. Does this sound OK? Usually for the 5% genuine savings it needs to be saved for 3 months. Savings $6-7K in a month normally isn't valid to meet this requirement. Re: Finance - anxious first home buyers 8Jun 28, 2013 11:23 am hey yk83, My wife and I were in a similar situation to you, minus the default. We had about 23K genuine savings and we purchased a house and land package for 412k (it was 422k but there was a 10k rebate on the land part of the package which came into affect when we settled on the sale of the land, which was fkn awesome) Anyway, we felt we were just on the verge of being all good with nothing they could knock us back on. We were a bit nervous about having only just over 5% deposit. But it all worked out ok. I did ask my broker (who was also fkn awesome) about defaults and he said that it will impact your credit rating but only for 3 years, so you might be sweet. My advise would be to get your savings up just that little bit more. Don't rush into it as soon as you get your 5% deposit saved. go for 7 or 8%, just so you can stress less. Good luck mate, hope it works out sweet for ya! At the end of the day, the bank wants to give you a loan cause they make crap loads of $$ off ya. You're broker wants to get you a loan cause they get sweet commission and the builder wants to sell you a house cause they are making sweet $$ too! Just be patient and remember that they need you! Re: Finance - anxious first home buyers 9Jul 02, 2013 10:13 pm yk83, may i kindly ask, why you are going through a broker? you do know he/she will be recieving a commision for the entire term of your loan from the financial institution he/she gets the loan for you, from ! Banks nowadays can most certainly give better rates IMO. taking my abovementioned comment into consideration litterally. Especially with their personal bankers on the road "acting" as brokers for themselves within the bank, without the commisions. They really do work for you these days. Banks are pretty damn hungry for loans at the moment ! Re: Finance - anxious first home buyers 10Jul 04, 2013 9:38 am You don't pay for the broker, the bank does. So effectively, if you don't go thru a broker the bank gets the commission that they would have given the broker. The amount of work that a good broker puts in is worth whatever they get in my opinion. They do almost all the work for you. If you were doing it on your own you'd be forever shopping around tyring to find the best loan. A good broker can submit 5,6,7+ applications and you can pick the best offer. Re: Finance - anxious first home buyers 11Jul 05, 2013 9:44 am The brokers commision that the banks give " a Broker" can actually be discounted off your already very low rate . Inturn you end up with such a low rate, no broker could compete. no excuses for being lazy, unless all you want to do is fill a brokers wallet for the entire term of your loan ? Re: Finance - anxious first home buyers 12Jul 05, 2013 9:57 am I'd still recommend a broker for a first home buyer. Definitely not for an investor such as yourself. But for a first home buyer, who doesn't know the process, who is new to the market, a broker can be invaluable. Not everyone is keyed up on finance and a broker is someone who is keyed up in your corner. It's not lazy, not everyone has the time to go home loan shopping all day. And "all you want to do is fill a brokers wallet" ??? come on mate, ease up. I don't like the condescending tone you're using, are you implying we are all stupid? Re: Finance - anxious first home buyers 13Jul 05, 2013 10:10 am Plus who's to say cant just you use a broker to get in the market and then re-asses in a few years and then re-finance yourself when you are ready? Not many people stay with the same loan for 20-30 years anyway do they? Re: Finance - anxious first home buyers 14Jul 05, 2013 2:00 pm jellybelly The brokers commision that the banks give " a Broker" can actually be discounted off your already very low rate . Inturn you end up with such a low rate, no broker could compete. no excuses for being lazy, unless all you want to do is fill a brokers wallet for the entire term of your loan ? Want to make a bet on that? Brokers can get discounts on carded rates as well, its not just a one way street as you seem to claim. Banks can **** up your loan by doing things that end up losing the client thousands of dollars over the term of the loan despite having lower interest rates, but you never hear people like yourself complaining about that. There's always been this stigma attached to brokers, some of it substantiated, some not. In the end people believe what they want to believe, even if they are wrong. Cheers Tom Re: Finance - anxious first home buyers 15Jul 05, 2013 3:13 pm Hey guys, Update: I got my default removed using a solicitor. I guess Ill be OK from here (hopefully). Thanks to Brahma Bull ,joshnjacqui, plc and jellybelly for the advise. PM if you need the solicitor details. AND back to the discussion above, as a first home buyer, I am inclined towards getting my loan through a broker (not lazy, but just to find my way through the maze). Having said that, i will be comparing the rates between banks (talk my bank and couple of mobile bankers about the interest rate they can offer) and take it from there. Re: Finance - anxious first home buyers 16Jul 05, 2013 7:41 pm you dont sound lazy at all yk83.( phewww!) Good luck with your endeavour, Just try to take the emotion out, ... as harsh as this sounds... Its purely buisness. Re: Finance - anxious first home buyers 17Jul 05, 2013 7:56 pm plc jellybelly The brokers commision that the banks give " a Broker" can actually be discounted off your already very low rate . Inturn you end up with such a low rate, no broker could compete. no excuses for being lazy, unless all you want to do is fill a brokers wallet for the entire term of your loan ? Want to make a bet on that? Brokers can get discounts on carded rates as well, its not just a one way street as you seem to claim. Banks can **** up your loan by doing things that end up losing the client thousands of dollars over the term of the loan despite having lower interest rates, but you never hear people like yourself complaining about that. There's always been this stigma attached to brokers, some of it substantiated, some not. In the end people believe what they want to believe, even if they are wrong. Cheers Tom We are all wrong , aren't we Tom ! Re: Finance - anxious first home buyers 18Jul 05, 2013 7:58 pm joshnjacqui I'd still recommend a broker for a first home buyer. Definitely not for an investor such as yourself. But for a first home buyer, who doesn't know the process, who is new to the market, a broker can be invaluable. Not everyone is keyed up on finance and a broker is someone who is keyed up in your corner. It's not lazy, not everyone has the time to go home loan shopping all day. And "all you want to do is fill a brokers wallet" ??? come on mate, ease up. I don't like the condescending tone you're using, are you implying we are all stupid? Take a deep breath, . Take emotions out of it, please.and read my posts i respect your opinion, and appologise if i upset you. Re: Finance - anxious first home buyers 19Jul 15, 2013 5:18 pm I went with a broker too and he was invaluable. Infact, I saw 3 brokers and chose the one who could not only get me a great deal but who also was able to key me, as a first home buyer, in on all the its and bits I needed to know. He was a fantastic help and he can take his commission because he honestly earned it. That is coming from a 3rd year law student who understands all the mumbo jumbo and legal jargon you come across in the process of buying/building. Building the Leabrook with Fairmont Homes in Mallala, SA. Building contract 24/3/13 Council Approval 18/6/13 Selections 29/6/13 & 1/7/13 Site works 21/10/13 Slab 7/11/13 Re: Finance - anxious first home buyers 20Jul 15, 2013 7:10 pm YAY! Congrats YK83! Hopefully this means good things for you on the way forwards We have gone through the same financier for both of our houses. The first time we went directly through them and the second time we knew we had to go through them, but due to a tricky income (wage plus guaranteed "bonus") we wanted someone who could fill in their boxes correctly and get us more money. It worked ______________________________________________________________________ Signed up Jan 2013........Almost done! My thread: https://forum.homeone.com.au/viewtopic.php?f=31&t=65763 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 67443 Congrats. Will be watching this progress and interested to see how you go with summit. 12 36037 We already paid for somfy motors for the blinds. The quote above was purely for “pre-wiring” so the blinds company can install the motors and blinds. That’s why we… 5 18234 |