Hi, everyone,
This is my first post, so please don’t judge harsly [
]The situation now is such, that as of end of this year I will get a high income, which will double approximately 1/2 way through 2004 (that’s the contract). I have a fiancé, but at the moment I have no financial liabilities, and since I live with my parents (for now) I don’t even have to rent!
I feel a bit of a lucky bugger, as I can get a good start in investing, however I feel, that every day going by – I loose money – property value grows, and I still have nothing. No savings either.
Can someone point me in the direction of what is the best way to get a bank (or other alternatives) to give me the loan I need, so that I don’t have to put any money down for the property, it would be good if I could borrow the lot and maybe even a little more. There are possibilities out there, but I’m not quite sure, which one to choose.
The second question is – with the growing interest rate my understanding is that the property prices will grow slower, and I have a feeling that the (expected) 0.75% increase may cost a few people their homes, because of this – is it a good time to buy sooner, or can I hold out for a while and would it be better for me to get some money together first?
And thirdly – since this is my first property – am I entitled to the first home buyers grant? or do I have to live in that property to get it?
Big thanks to all (in advance [
])G’day Ksafik…
Not bad for your first post.
Personally I would wait..maybe for up to 18 months
after all the R/E Boom has been going for 6 years and probably about to take a breather, slide or fall in price.While you are at home rent free why not take the opportunity to save as much as possible with the Bank that you are likely to Borrow from down the track. I would not buy today. Wait.
FHOG is available provided you live in it. Cosidering you are short of $$ today that is one more reason to consider that when you do invest,get the $7k and have your own home.
To help you save. Pay yourself first, buy a book..
“The Richest Man in Babylon”Cheers
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]Hi Ksafik,
And I own and have read the same book at least 7 times.
Bring thy fiance and thy finance unto the family moat.
Judgement day comes not from thy first post, but from thy last.
Phil
I love that book. everytime i feel confused or not sure which way to go, i read that book. My copy has highlighted bits all through it and penned notes all over the place. Thinking about buying another copy, but as you know luckyphil, i wont pay more than a dollar for a tube of toothpaste so i may just have to hint for someone to buy me a copy of the book for christmas (my girlfriend perhaps??) rather than fork out the money myself [
]Ksafik
Interesting first post, it was idealfor Bill, he couldn’t have written it better himself. And I agree with him that prices are going to go down over the next year, maybe not as much as Bill thinks but he has got more experience under the belt than me.
I do believe that the best time to by is NOW! But that is my belief, you have to develope and trust your own instincts. Having said that that only applies when you have your structure set up for investing, that includes a business plan.
As to your income increasing – wooo hooo – but don’t waste it, if you are going to wait make sure you save it and for sure read that book it is essential reading.
As to your borrowing, you will find most lenders won’t lend above the value of the property on your first deal as they have no security, but one of our brokers can help with that better. My advice is to use your income to save something, the more you put in the more you get out.
Can someone point me in the direction of what is the best way to get a bank (or other alternatives) to give me the loan I need, so that I don’t have to put any money down for the property, it would be good if I could borrow the lot and maybe even a little more. There are possibilities out there, but I’m not quite sure, which one to choose.
You will need to speak to alot of brokers and lenders until you find your deal. But money talks get that deposit saved.FHOG – you are only entitled to the FHOG when you buy your first home, you do have to live in the home within the first 12 months.
Another book that a good friend lent me is called The Alchemist, it was very inspiring and helped to clarify by dreams and direction. Borrow them from the library to SAVE a buck.
Good luck
Cheers
Leigh K[]Carve your own path and lead the way …
Ksafik,
Invest – to commit money to earn a financial reward.
I think the important thing for you to do first is create a budget and stick to it.
If you live with your parents and pay no rent, you should be able to save money, no matter what your income.
If you can’t, then that means you will always struggle to create wealth.
Steve’s book points out in detail that if you can’t control your spending, you will always struggle to get ahead.
Once you have control over your finances, you will be able to get more benifit from your investments.
I would definately recommend saving as much as possible to give you a secure base to start from.
Dino
“If you don’t know where you are going, every road will take you there.”
Ksafik,
Buying your own first place is exciting! Buuut…
I agree with Dino, you need to save money first. You can use the FHOG if it’s a home for you and not an investment property. But if you haven’t saved a deposit, it may be that you get into trouble down the track. Why do you want to borrow 100% or more? Traditional lenders will require a 20% deposit so you don’t pay Lender’s Mortgage Insurance. They will require this 20% to be “savings”, and not “gifted” to you.
Whilst others on here might suggest you go in with no deposit, I think it’s fiscally better for you if you have a deposit. If you have a more than 100% loan and interest rates rise and property prices decrease, you may have negative equity and the bank can make you sell.
The sooner you pay off your home, the sooner you have equity to play with elsewhere to buy an IP or so.
kay henry
Kay
Not sure where you are getting your finance ideas from.
2 major lenders offer 100% loans at only a slightly loaded interest rate.
Several other majors lenders will offer 90% of the purchase price where the deposit can be raised by gift / borrowing or any other method as long as declared.
2 immediately spring to mind that will offer 95% loans without the need for a savings history as long as you qualify for the FHOG.
Mortgage Insurance is payable normally over 80% of the valuation / purchase price and in most cases can be added to the loan.
Cheers Richard
[email protected]
http://www.fhog.com.auThere is no such thing as a problem.
Just a solution waiting to be foundRichard Taylor | Australia's leading private lender
Hi there Ksafik,
Sounds like exciting times for you! but I can agree more with the whole “Budget and save” mantra
Its really boring but it really works!
Ive been reading finance books since I was 18 and plodding along wondering how Im going to make it big in life through investing. Only a couple of weeks ago did it all fall into place:
The key to all investments is cash.
It is the basis and goal of everything financial.Once you have the cash you can leverage it through lending and investing!
So I too reckon the first step is to budget and save while you learn and read and plan the next step!
I set up a budget in exel that my wife and I live by, It shows us where our money is going and gives us determination because we can see it working when we get our bank statement. The more we save the faster we move towards our goals.
And thats another point decide on a goal our is to have one of us retire in 5 years time
we then worked back from there to see what we need to do to acheive that. There is a lot we must do – and learn, and we might get there.
Educate yourself on good saving/investing habits
Save while you learn and when you feel like you know enough to make a good decision you’ll already have some cash behind you to take imediate action.What the mind of man can conceive and believe, it can achieve.
Thank you everyeone
I do have a lot of books and i read them. I have read “the richest man in Babylon”, “The millionarie mind”, “Rich dad, poor dad”, “5 years to financial freedom”, “Ordinary millionare”, “0-130 properties in 3.5 years”, and a few otheres …
I do have a system going, and i do pay my self first, and i do have some savings but they are small, as I am just finishing my last uni exams right now, and the current job paid enough to survive, the contract that i have got now (starts end december this year) will actually allow me to seriously get involved with real estate.
My understanding of real estate is “Buy as soon as you can, as much as you can and hold it as long as you can”. I think that prices will go up or down depending on the area, though i would agree, that they may now slow down their growth rate.
Bill – why did you give a specific figure – ie 18 month?
I guess fhog is not for me, as i need an investment – not a place to live.
What sort of external costs am i looking at exactly when i buy??? morgage insurance, accountant charges, taxes … can someone please write down some figures?
on a $350.000 property i will need:
a)$70000 (20% deposit)
b)$25000 (to transfer the proprty – accountant charges, taxes etc)this adds up to almost 100k – that’s a lot of money to put up front – that’s why i feel i am best to borrow the lot – i can get my property quicker and then pay it off as soon as i can – i think this is more rational than wait … can someone prove me wrong?
Qld’s 007,
Thankyou for picking up any factual errors I have made- it’s kind of you to do so
)Whilst some organisations might loan with no deposit, I am more interested in people not getting in too far over their heads and losing their homes. Others made comments regarding saving for a deposit, as did I.
I don’t think yours and my information are very different. I do believe that LMI is a waste of money, and I also believe that saving money is a good thing to do.
If I make a factual error on here, I am not the first person to do so, and I’m glad there are people like yourself here to correct me.
kay henry
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