10% or 20% deposit?

HI Insider,

That was my thinking aswell. I should clarify that the deposit is funded from an account bearing an interest rate of 6.75%. Therefore I thought that if we pay mortage insurance, we would be allowed to only put in a 10% deposit and fund the 90% on a 6% interest rate (the new mortage).
I’ve been told by numerous accountants that they would do it with a 20% deposit. In my way of thinking, you don’t break even till a few years down the track, whereas with only a 10% deposit on 75K, the first home owners grant basically almost covers the cost of outlay.
I might be getting myself more confused though. Perhaps it all breaks even in the end.

Cheers

Confused Sooshie []

There are no problems, only solutions

Hi all,

Insider, I think I win hands down with the number of spelling mistakes [].
I think my husband has decided on 20% LVR, as cash flow is better p/w this way. Our accountant suggests this way, so who am I to argue [] I honestly would rather leave the figures to hubby. Personally for risk minimization I prefer to do it at 10% LVR.

Horses for courses.

Cheers
Sooshie []

There are no problems, only solutions

HI all,

Well yesterday we discussed the issue of LVR and as Michael (my hubby) explained, it was trying to convert personal debt into investment debt. There are tax implications, which (taxation) is an area which is something I wouldn’t touch with a ten foot pole. It really is not my area of expertise. Most of you know I come from a medical background (nice and juicy stuff) far removed from this area. I have always gotten my hubby to do my taxation (or the accountant). I guess this just highlights the importance of trying to find someone who will balance the strengths you bring to the table (as in my case, the personal/social skills and the love of real estate) and weaknesses (calculations, taxation and financial stuff, all the dry stuff [}]!)
Anyway, thats just by the by.
At 80% LVR, the banks don’t see you as a liability, but if you have to get mortage insurance (90%) they are more likely to limit your potential to borrow and you get maxxed out sooner.
Stuart, I’m not sure I followed your suggestion.

By the way, if I seem ‘Thick’ in this area of finanaces, it’s because I am [:0)]. Similarily, If I asked you what placenta previa or hyperemisis gravidarum is, you’d say “What?”.
Horses for corses…. please bear with my ignorance on financial matters. I do understand the basic concepts, but when getting into the nitty gritty, unless it’s detailed down on paper, I find it hard to follow.

Cheers
Sooshie []

There are no problems, only solutions

Hi Felicity,

I’m a Midwife. I have other qualifications including Acupuncturist, Phlebotomist (fancy term for ‘blood sucker’ [:0)]) and Registered Nurse.
I don’t know of too many nurses that are good with finances, but that’s not to say there ar’nt any!
As hubby told me, over dinner, I spelt ‘corses’ wrong. So I correct it now…
Horses for Courses. [8D]

I believe you are going to meet hubby on the forum shortly… He’s going to shed some light on the scenario’s I’ve proposed and perhaps explain his decision. I’d love to read the responses after that. I’m sure you’ll all be agreeing that it’s a good idea I leave finances to hubby []

Cheers
Sooshie [:0)][:0)][:0)]

There are no problems, only solutions