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Hey guys,
Im at the stage of organising a loan with the bank, but I am not sure how I should do it..
I have about $10,000 in the bank to use.
This is what im trying to decide on :-
Purchase price is $125,000
Borrow 100% ($125,000)
Pay $9800 in fee’s
or
Use my $10,000 as a deposit on the loan
So borrow $115,000
Pay $7000 in feesI can borrow the $7000 for fees off my parents and put my $10,000 on the loan..
So option one I can be $135,000 out of pocket and just owe the bank $125,000.
Or option two, be $122,000 out of pocket and owe the bank $115,000 and my parents $7000..What if you borrow the $7000 from your parents and go in with a $17K deposit?
Personally I would prefer to use a higher deposit which is then usable equity and “give” $7K or $9K to some bank johnny…
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Im not sure if you understood Simon,
If I go in with a $17k deposit then im still going to need money for fees which I dont have… Stamp duty, morgage insurance etcThere may be a happy medium in which you utilise all available funds to decrease LMI instead of borrowing less and paying more.
A broker should help find this balance and suggest new options.
Have you considered buying this property as a PPOR to use the FHOG and Stamp Duty Exemption provisions? You only have to live in it for 6 months to satify the provisions of the FHOG. During this time you can take in boarders to help with your costs [blush2]
Simon Macks
Residential and Commercial Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Bez. As Simon said (should say Simon mentioned really, but ‘Simon said’ sounds better [biggrin] ) you will find juggling the deposit amount really does affect the LMI amount you pay. If you can get your LVR less than 95% , which requires a deposit of anything over 5% it will drop your LMI down a bit. Unless you are a first home buyer with the $7k towards costs, LMI really hits though. If you can make the repayments comfortably and don’t want to borrow any or much from your folks, and like to have a bit left over in the bank, a 100% loan is not all that bad especially if you bargain hard for the property price in the first place. In 6 or 12 months time you might have yourself some nice equity. All the best with whatever you decide.[strum]
If you are going to be living in this house you might consider if you are going to purchase furniture when you move in.
Duckster Financial Services
http://www.ducksterfinancial.com
Helping to make the great Australian Dream come true !Comments are of a general nature and may not be relevant to your individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Two suggestions:
1) Look at the new shared equity scheme. Borrow 100% although only make repayments on 80% of the loan.
Fees considerably reduced. You could utilise the FHOG and your savings to borrow 90% instead of 80% and enjoy more of the equity growth/
2) Take out a 100% loan with a lender who does not charge mortgage insurance.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hey guys, thanks for the advice.
I am buying the property for an investment so im not able to use the FHOG, iv decided on putting my $10,000 onto the loan and borrowing the $7k for fess’s off my parents..In 6 to 10 months time I can have the $7k paid back to my parents but in 6 to 10 months I wouldnt be able to pay $10k off the home loan.
