This is my first post on this website and I would just like to say what an awesome resource!
I have a question regarding property investing and bank loans:
I'm currently 19 years of age and have stable income (government employee). I plan to save %20 for a deposit on a IP and use the first home owners grant.
How likely am I to receive a bank loan?
CoreyRussell 1Member@russell-1Join Date: 2009Post Count: 2
Sounds like your on the right track , but there may be some faster, ezyer and more cost afective ways to get you started on your first IP, iam sure they could help, check out a site i know of, they really know there stuff @ http://www.ezyhousingsolutions.com.au .
Russell 1dnh83Member@dnh83Join Date: 2009Post Count: 81
Couple of things to consider, my bank allowed me to use the FHOG towards the 20% deposit when I purchased. This may help you get into the market a little earlier.
Additionally, if you're in a position to leverage off your parents, then they may be able to put up some of the equity in their property without any cash physically changing hands.
I'd recommend you seek some further information on these, tailoring them to your own situation. But I found these were both a great way to get in and get started !!
I wish leverage was an option for me but unfortently it isn't.
I think I will consult with a bank manager and see what they think about it.
Id suggest to see a broker….
Also, if utilising FHOG, you will need to live in it for 6 months within the first 12 months of purchasing. I dont think fhog is available for straight out investment properties, pretty sure you have to live in it for at least 6 months.
20% will be good to put towards, however if you want to avoid the genuine savings rule, you want to keep the max loan at 80% of the value. Or keep about 5% savings in account for 3 months, and a lender may considering lending you 90%.
Dont worry about age, if thats a concern to you. I am 20 and recently purchased 3 months ago (with CBA), and used the fhog – and recieved about 16k towards the property (which was a massive help). CBA also do 1 day employment.
Have you ever applied for credit before, eg. credit card etc? As this will at least establish a credit rating (credit file/CRA) for you. I guess there are a few variables that come into play, I have a broker that is absolutely fantastic, and helped me with my loan (had I gone to a bank direct, not sure if it would have been approved!!).
You need to find any avenue that can strengthen your overall application to the lender. They would ideally like to see some form of stability, some form of credit rating, savings will also look good for you.
I hope this gives you a little grounding, I work in finance, if you have any other questions, please do ask.
Thanks for the informative reply.
You recieved $16k from the FHOG? I thought it was only $7,000 – $12,000?
I've never applied for a credit card before, I would rather not get myself one if I could.
Also how do brokers charge is it per consultation, what is the average price per visit?
No dramas, it is always good to get help/advice with a big decision like buying a house!
Some brokers charge a brokerage fee, however some actually get paid from the bank….so they wont charge you anything. (my broker doesnt charge).
Well, I said the same thing about the credit card. However, as soon as I turned 18, I applied for one for a small limit of $500, to at least establish my credit file. The file is created as soon as you apply for any form of credit with any institution, whether it be for a credit card, mortgage, personal loan etc etc.
If you like, I can pass on your details to my broker (contact number, email address)… and he can have a chat with you as per the best options for you. It is a big help, saved me running like a crazy person from bank to bank.
With the FHOG, I got it when the higher bonus was in, now it is sitting at around $10.5k (I think) in VIC, are you based in vic?
Corey, you are definitely doing the right thing in buying a house…, also you sure you don't have a family member or friend that can possibly attach their property as security, or gift you the funds to purchase?
Thats great I'll have to seek out some local brokers as I live in the NT (Darwin).
Do you think its a good idea to consult with a broker so early on? As of now I currently don't have any savings towards a bank deposit. I'm gathering tactics, so that I can lay down a game plan that I can semi-count on working.
Do brokers give you suggestions on what paths you should take to acheive getting loans?
Well, my thoughts are, to see a broker maybe as soon as you can…. At least they may be able to give you a general direction/goal for your savings, and laying down a game plan…. They will be up to date with lending policies and will therefore have an idea on where you should start (although policies are always changing).
I also know that there are some lenders out there that wont actually lend in NT.
Anyway, ill have a chat to my broker (he is my roommate, which is handy) for you and at least give you an idea on where to start.