Gday everyone, I am after thoughts and comments on my situation.
I am a full time student with Austudy as my only income, a situation likely to continue for the next 3 years.
I want to buy a 3 bedroom, 1 bathroom house on the Gold Coast and have done extensive research…I can find what i’m after for around $320000. I currently pay $420 rent p/w. This will be my first home – therefore I’m eligible for FHOG
I have $270000 deposit, so only need to borrow around $50000.
I plan to buy a house that sits between 20 – 30% below the current median house value for the suburb, with potential room for capital growth.
From an investment point of view, what are thoughts on:
1 – splitting my deposit and buying 2 properties; 1 to live in, the other to rent out
2 – buying duplex or unit vs free standing single house dwelling
3 – continuing to rent and buying for investment onlyI need to be very smart about how I use my deposit… any thoughts or comment are appreciated!
Hi,
Have you checked with lenders whether you can get the $50k loan with just Austudy as income? How are you paying for stamp duty?
or are you getting the $50k from a non bank source?
Just askin’, cos without finance the other questions don’t matter.Cheers
swampy
can get a traditional lender to finance because equity will be over 80% and with rental history, they see me as a secure candidate – good on em!
Well, this is the interesting thing, working out your strategy! are you youngish? (not a mature student?)
Part of the problem for me, and others, I suspect, is there are too many choices and options!
Personally, I would buy own home first, pay off ASAP, then invest, purely cos CGT exemption on PPoR is use it or lose it. Also if given choice, I would rather have 2 units rather than one house. But…!! Also buy as much as you can without over stretching yourself. But that’s just my opinion
What are your plans after study finishes?
Sorry i hate to say Kjun that is simply not correct.
can get a traditional lender to finance because equity will be over 80% and with rental history, they see me as a secure candidate – good on em!
Under NCCP your rental history and your loan to value have little bearing on your ability to service the loan and will not get you over the line. I am unsure as to the amount you receive on Austudy but assume it is around $10,400 per annum which is less than the minimum Living Allowance used by all lenders taken from the Henderson Poverty Index.
Unless you have other income you have not mentioned you will NOT qualify.
Now in regards to the other options i would comemnts as follows:
1) Splitting your deposit will not help you as you will need to borrow more and even with a percentage of rent being taken into consideration you would not qualify for 2 loans.
2) Buying a Duplex will mean you will not qualify for the FHOG or the Qld Stamp Duty concession.
3) Again without hard data it is hard to comment but your liabilities will stay the same (rent still needs to be paid) and yet only a percentage of income will be considered for servicing.As Swampy mentioned in his initial answer to your post "if you cant get finance then you cannot purchase" Remember both traditional, non traditional, private, vendor finance etc all falls under the new NCPP guidelines.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for the replies…
My income is $22K pa and my current building society has indicated they are (more) than willing to lend me $50K as my ability to repay weekly repayments of approx $80 is a given…
I was unaware of the duplex and FHOG situation, so thankyou, that crosses one option off the list.
I am (aaarrrrggghhh) a “mature age” student – 40 years old and will be 42 when I graduate with the plan of going into private practice. I am very aware of over-extending myself and my ability to repay a loan, as a practice takes time to build – so in the mean time I’m working hard to build up my client base.
Thanks for taking the time to reply people!
Wow 22K per annum on Austudy thats not bad.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You are able to get the Firts Home Buyer Grant if you purchase a duplex.
Please refer to the below website
http://www.osr.qld.gov.au/first-home-owner-grant/index.shtmlThere are a few options out there for you.
Bank West and Liberty are two funders that I know off hand that will lend to you with only austudy as income to service the debt, Bank West will also lend about 80% if required however it will come down to your ability to service the debt.Regarding the best way to structure your loan to best use your saved deposit, it will really depend on what you are looking to achieve in the future. The best advice I would give you is to see an accredited Mortgage Broker that will be able to sit with you in detail and go through options with you.
I would suggest that you look into an option for NRAS properties (Government funded program) if you are looking for an investment property. Although these are investment properties and you will not be able to receive the First Home Owners Grant you will be able to receive the $10k Builder Boost. This will leave you eligible to still claim the FHOG at the later date (when you are ready to purchase a property to live in) and will also allow you to use the rental income to help service you loan for a higher lend (ie save more money for your next deposit).
I work at a Non Bank Lender and would not be able to lend to you just on your Austudy income alone, however if you like I would be more than happy to give you a name and number of one of my brokers that would be able to assist. Just send me an email if you would like more information or a brokers number that is specialist in finance and property if needed.
Good Luck,
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