Browse Forums Home Finance 1 Dec 28, 2016 4:42 pm Hi everyone Facts -I'm in my mid twenties, -I don't have a bank of mum/dad/brother/cousin/nan to help me financially or otherwise, -I am single, -on approximately 80-85k a year, -same employer for a decade, outlook looks moderately stable, -I have no dependants, -I have no debts at all, -I currently rent $450pw, -If I fall (become unemployed or worse), there is no one to help me financially... so is a long way to drop -Drum up your own calcs for my living expenses, but basic approximate running costs for me is fuel (topped up approx every 3 weeks $70), food (whatever it costs) internet ($74), elec (Approx 100 qtr). All this said - I am wanting to make a better life for myself by buying and settling in WA. I'm excited and willing to save, but just don't how much is enough. I have savings already (paltry in comparison to what is required), but I'd like to leave that alone and create a new stash specifically to buy a home. I come from a poor family, so they're not an option at all. Also, as result of the fact, I don't know what to expect when it comes to the cost of buying a house and servicing its loan as no one owns a home in my family. How much do I need to save? What do "items" specifically, do I have to pay for? What is everyone's view on WA's Keystart Home Loans? $400k-$600k house is the target. I know 20% is a good start (hard yakka for someone starting from scratch without a financial support network). Thank you for your help. Re: First home - How much do I need to save? 2Dec 28, 2016 4:56 pm Congratulations!! Good on you! Realistically you can get started with a lot less than the 20% you're proposing - and you know that I think. Minimum is around 5% + enough to cover your costs. Costs vary depending on what you do (and if you can qualify for any first home benefits) but as a rule of thumb that's another 5% on top. These are minimums and the more you save the better. I haven't done an affordability calculation but you're probably not too far off the mark - would bed a full and proper conversation to tell you more. Better question is how you feel about the repayments. I can't see the original post now I'm writing but I think you said $400k ish, if you borrowed $400k (which means purchase price of around $420k or thereabouts) you're repayments will be around the rent you're currently paying, so probably comfortable? In regards fall back position, you can consider insurances to protect your income in case of illness or redundancy - and / or you might like a boarder to help with running costs whether you're well or not. I have no experience with Homestart but hoping a WA broker will put their hand up with info for you. Best of luck! Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: First home - How much do I need to save? 3Dec 28, 2016 5:22 pm Thank you Rebecca for the guidance. I guessed you could get away with a 5% deposit, it's good to have confirmation on that as an exercisable 'option'. So, say- 1. I saved a 5% deposit for a $500k home(I'm not likely to actually buy something at that price, but will budget to that, and work my way back). That'd be $25k. 2. On top of this $25k, I should save an additional $25k for other costs... which are? Its point 2 I'm stuck on, I guess. Assuming I am not eligible for any grants, what costs would I need to pay do you reckon? I truely have no idea but guess stamp duty would be a factor etc. I seem to be eligible for assistance, but I'll assume and budget for the not, until the time comes to buy. And thanks very much for the risk mitigation strategies. So, 20% is a good start hey? That's a steep mountain to climb Re: First home - How much do I need to save? 4Dec 28, 2016 6:01 pm 20% is perfect world - in most cases the property values will rise faster than you can get in so I say get in as soon as you can as long as it suits your goals and needs, aim for 10% as per above, and then start looking while you keep saving. Costs are stamp duty (which is roughly 3.9% of the property value, very roughly, don't keep me to that) and legal fees - roughly $1500, pest and build or strata inspections - roughly $500, and loan application fees - allow up to $500, and a bit of money for sundries like rates at settlement, moving costs, connection of your internet etc. All of that doesnt add up to 5% so you should have a little cash left over, unless you have an expensive removalist Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: First home - How much do I need to save? 5Dec 28, 2016 6:38 pm heh I won't hold you to anything, promise... was just after rough guidance, that's all. So 10% is the go... once there, start looking and keep saving! That fits into my plans nicely! Rebecca, thanks a lot! Appreciate it. As far a repayments go, yes... very comfortable (now). I wasn't always on the wicket I am now. I started with crappy apprentice wage, as you do. That was hard; then low start pay packet on 'graduating' that increased over time. Not whinging, as I'm fortunate to say especially here in WA, that I have a job, and the pay isn't going to go backwards, touch-wood and all things being equal. I would've been well on my way to what I needed if I didn't use some savings to travel; but I wanted do that (travel) before I engage myself with a mort-gage Anyhow, I've digressed. Thanks a million! If anyone has experience with WA's Keystart Home Loans and is willing to share, please post... I'm all ears/eyes! Re: First home - How much do I need to save? 6Dec 28, 2016 7:21 pm You're very welcome and I won't argue with the travel, there's always a right time to get into your first home Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: First home - How much do I need to save? 7Dec 31, 2016 4:11 pm Well done on being where you are and taking steps towards your first home Your a lot further ahead then most people I know. I don't know how much you'll need, but I'll share some of my figures with you. I was the same, mid 20s, single, doing it on my own financially, earning about 49k... I was able to save a 9k deposit, which I used to buy a block of land (worth 152k), due to a very delayed settlement (over one year) I was able to save a bit more by the time the balance of the deposit was due. My house was 180k, of which I paid about 9k (5%) deposit.. but this was after my land settled. Total package has worked out around 330k. Its important to work out WHEN you need money. I thought I needed to have the full 20% deposit in the bank before I started looking, but actually I ended up needing it 18months later, but by buying land early and continuing to save I got to lock in cheaper prices.. Also, check out your entitlements, I'm in VIC and I was entitled to 10k First Home Owners Grant, and a 50% reduction on stamp duty. As for other costs... I think my additional costs over and above settlement were just over 5k. This was a whole lot of bank fees, conveyancing fees (about 1250 I think), stamp duty (about 3000, but I will get 50% back when I move in), title insurance (this was optional..about 300).. My recommendation is get a mortgage broker. My mortgage broker has been fantastic. She's made everything so easy, and she is definitely not getting paid enough (the bank pays her, not me so its not an extra cost for you upfront), as she's been holding my hand for nearly 3 years now (lot of delays on my build). Also, with regards to protecting your income.. do yourself a favor, GET INCOME PROTECTION INSURANCE. I work in the insurance industry, and I can't recommend this product ENOUGH, especially for singles without financial backup (i.e. a partner). You may also be able to claim all the premiums you pay for the insurance back on your income tax (but check with a tax expert). While your getting Income Protection, check out Life, Total and Permanent Disablement and Trauma cover. Income Protection, Life and TPD cover can also be paid for through Super, get in touch with your super company and find out if you have any cover, how much you have, and then you can increase it if you want. I have Life and TPD through super, Income Protection paid by my work and Trauma I pay for out of my own pocket. (Also remember Life cover sometimes also includes funeral expenses and terminal illness cover, so even if you don't want to leave money to anyone.. it can be useful for those reasons). All the best Re: First home - How much do I need to save? 8Jan 02, 2017 3:06 pm Thank you for sharing... this is a big help! You have no idea!! (Well, actually, you do haha) Re: income protection- I definitely/100% have TPD/Death coverage with my super. I'm fairly sure it comes with income protection for a time but I have to re-check. Nonetheless, I will re-check my total personal insurance coverage (tpd/death/health/car) for this new year and make adjustments as necessary. I'll also look seriously at income protection options, more intrinsically. On the subject- I forgot to mention car insurance expense - AAMI comprehensive $768pa. And miscellaneous other non-essentials totalling $63month that I forgot to mention (union fees etc). 1 car rego - as published on internet for WA (year rego). I don't have health insurance, but anyway... that's a different conversation I think. Thanks a lot!!! I really really appreciate it Re: First home - How much do I need to save? 9Jan 11, 2017 7:00 pm Your welcome. Good luck!! Thought it might help to mention that in total... since buying my land I've spent $53k on the house, which includes deposits, settlement fees, bills (Water), rates.. etc (not incld mortgage payments)... Re: First home - How much do I need to save? 10Jan 12, 2017 10:55 am Definitely have a sit down with a broker. Helps to lay out the costs and make it all much more manageable. Also if you are looking to build as opposed to buying established the WA government just increased their first home owners grant to $15,000 (we just missed out by a month as we had signed contracts just before they announced it!). So you can consider yourself as already being $15,000 ahead with your savings if you do build! Also you shouldn't need to pay Stamp Duty on your first home (up to a certain cap which I think is around $500k for house and land but I'm not sure as we didn't exceed it so didn't have to worry about it). Also if you do build take a look at land prices and your preferred areas and also neighbouring developments. We initially wanted to move into the same estate where my parents recently bought but the blocks in our price range were a bit cramped for our liking. We checked out land about 10 minutes further away and ended up picking up our block from probably $60k - $80k cheaper than ones selling near my parents place. All up we had about a 10% deposit saved up before deciding to go ahead and build. Our build thread with Smart Homes for Living in Wellard https://forum.homeone.com.au/viewtopic.php?f=31&t=86092 Re: First home - How much do I need to save? 11Jan 12, 2017 12:05 pm That tidy's everything up! Thanks SilentBob and aloenyx! I'll have a sit down with a broker when the times right, but for now I think I need to build a cash pile All the best for the new year... Re: First home - How much do I need to save? 12Jan 12, 2017 1:48 pm No problem, hope it helped. I'm pretty new to this whole home ownership thing myself! Good luck with it all! Our build thread with Smart Homes for Living in Wellard https://forum.homeone.com.au/viewtopic.php?f=31&t=86092 Re: First home - How much do I need to save? 13Jan 19, 2017 2:07 pm Hi MF, I've recently signed up to build - I'm in WA and going through Keystart so I can give you a good idea on figures. As others have mentioned, if you can get the First Home Owners Grant which is now $15,000, you're probably not far off being able to build today. Below are some expected costs based on a hypothetical scenario: Land: $195,000 Building Price: $215,000 incl. Prestart changes Less any prestart allowance: Let's say $5,000 (varies between estates and builders). Total: $405,000 Settlement costs: $7,800 Lending costs: $1,700 Total required: $414,500 Loan amount: 98% of $405,000 = $396,900 Contribution required (Total required less loan amount): $17,600 Less FHOG: $17,600-$15,000 = $2,600 Total you need to come up with = $2,600. HOWEVER, you will need to show genuine savings of 1% ($405,000 * 0.01): $4,050.00 So, if you can save $4,050, either held or accrued over three months (with no withdrawals), you're ready to go. Assuming the above figures work for you and you can get the FHOG. It will take longer if you want to spend more, or if you want to spend less and have already got genuine savings, you could sign up today. Definitely go through a broker. They make life so much easier, can run different scenarios, and don't cost you a cent. The lender pays them. Hope that helps! Fortunately Keystart just raised their income ceiling to $90,000 so as long as you earn less than that, you should be fine. First home builder - Brightwood Estate, Baldivis. Celebration Homes. Follow my build here Re: First home - How much do I need to save? 14Jan 22, 2017 10:12 pm Holy crap! Really!!! You mean the dream is (definitely, well and truly) in grasp?! You've blown my mind Thank you so so much for sharing. Lucky i'm sitting; you bowled me for 6! I'm so fortunate and grateful in that l can already tick those boxes. I'm going to logoff and come back tomorrow and re-read it because it's blown me away that much. Re: First home - How much do I need to save? 15Jan 23, 2017 7:29 pm Haha! Like I said, chat to a broker about your specific circumstances but I can quote those estimates as true based on my situation. I couldn't get the FHOG so I can't comment on that aspect but definitely start looking into it and hopefully the dream can be a reality sooner than you thought. Let me know how you go! First home builder - Brightwood Estate, Baldivis. Celebration Homes. Follow my build here Re: First home - How much do I need to save? 16Feb 23, 2017 5:08 pm Sorry about the delay, I will however report how I go. I'm set for a pay rise so I better get moving if I'm to be eligible for everything. Thanks again mate! Be back soon. Re: First home - How much do I need to save? 17Oct 17, 2017 9:11 pm If you aim to save 20% as a deposit that could potentially save you thousands of dollars. If you borrow more than 80% you will be charged loan mortgage insurance. Most banks require a minimum of 10% deposit. Then you will need money for extras like landscaping ($2000-$5000), blinds ($2500 - $15,000), fencing (approx $3000) and possibly your driveway unless you get the builder to do it for you. Also depending on which state you live in there might be a first home owner Grant which you can use as part of your deposit. Happy saving! Joelleg6 Our build thread - Acacia34 by Orbit Homes viewtopic.php?f=31&t=81316 http://bordoncasaacacia34.blogspot.com.au/ Re: First home - How much do I need to save? 18Oct 19, 2017 9:27 pm Great Job! MovingForward you are way ahead for people who are specifically your age. Basically in order to afford a house, you need more than just a down payment saved up. To do that there are six factors you want to pursue namely the down payment, closing costs, moving expenses, repairs and maintenance, the first few months mortgage payments and your emergency fund. Generally, you need to try to save at least 5% to 20% of the cost of the home you would like. Saving more than 5% will give you access to a wider range of cheaper mortgages available on the market. Thank you! I've just had a look at the website. The company are just building broker's. There are plenty of similar companies that basically draw your plans (they own them so you… 8 10948 7 12028 So it looks like we finally have some movement on site! Definitely later than expected, but I'll take any progress at this point. I'll drop by over the weekend to get… 5 27740 |