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  1. #1
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    Default Home Loan questions..

    Tell me about your home loan.
    Did you have 5% or 10% deposit?
    Did you pay interest only to start?
    Did you allow for an 8% interest rise just in case?
    Did the bank approve straight away?
    Any other loopholes/complications?

  2. #2
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    We had a 20% deposit so that we could avoid mortgage insurance. The preapproval took about 5 days. We paid off as much of our loan as possible as the more you pay off the less interest you have to pay.

  3. #3
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    It all depends on what bank you go with.
    I would work on saving as much as you can, and then perhaps approach a well known and trustworthy mortgage broker... Try and look for one that is self managed (ie, not a chain).....

    We did not have a deposit, as my OH had his own home first and we used that as equity, and a few years ago you didn't need much for a deposit...

    We let our mortgage broker work everything out and he was fantastic. I highly recommend talking to one, even if its just to get an idea of what amount you would qualify, and what banks have options that suit you. (ie, possible redraw if necessary, possibility to pause payments for x amount of months if something happens, certain fees, early pay out penalties etc etc etc)

    Banks usually approve within a week or so....

    We pay interest only at the moment only because we had bub 6 months ago and I am no longer working. But before that we were paying more then the interest and that just came off the top.

    You probably want to set up your accounts as an offset as well, as if you're doing interest, if your mortgage is joined, then say you owe $10,000 on a house, and you have $1000 in your bank, then you only pay interest on $9000 (you still pay the same RATE, BUT more money comes off the actual loan so its not just interest only)... If that makes sense.

    So confusing.

  4. #4
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    We had the full 20%.

    Our interest rate was 6.30% or something like that...

    We have ours linked to the RBA rate increases and decreases, so were not too concerned about the interest rate going up too high too soon.

    However, all our sums were done using 7.5% or something like that (back in March this is).

    We were approved straight away on my BF's wage only.

    No complications at all. We went with loans.com.au and they were super helpful.

    The only issue we had was with the vendor leaving all her crap here after settlement PLUS keeping a set of keys so she could gain access to remove her crap..

    As soon as settlement is done, get the locks changed SAME DAY! This vendor sabotaged the garden and some other things when she came back for her stuff later that day.. Crazy lady.. We don't forward her mail on, because of her actions...

  5. #5
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    We have portfolio loans (lines of credit).

    My DH had deposits for the first two houses, the rest were 0% deposit due to existing equity.

    We pay interest only at the moment as they are all for investment properties (we are renting). We are moving into one of them in January, and will increase to principle & interest. We are able to absorb interest rate rises, although considering changing to partial fixed and variable at some stage if rates continue to fall. They are all variable at this stage.

    With our most recent purchase we had to have valuations done on the other properties as they were purchased over 5 years ago. That took longer then expected due to a very slack valuer. Also, we had to extend settlement for a week because we purchased over christmas/new year and the bank did absolutely nothing with our application for over 2 weeks because our lending manager went on holidays and nobody did anything while he wasn't there.

    2 other people I know who have purchased this year have had to extend settlements due to slack banks.

  6. #6
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    We bought our first home 12yrs ago and had a 10% deposit. There was no such thing as the first home owners grant back then. We then went on to buy other properties over the years which was very easy because we had so much equity in the first one.

    We just refinanced to put up a huge shed, pool and house renovations. First time we have refinanced in quite a few years and boy has it all changed.
    We went through a broker who did everything for us. Bankwest have one of the lowest interest rates at the moment so the queue with them was extensive and it took many many weeks to get through the process and we found it quite frustrating but we got there eventually.

    Both dh and I are able to salary package which goes onto the mortgage, we then top up the additional amount fortnightly. We also always make extra payments to keep the interest down not to mention that it helps when the bank can see your able to easily pay your mortgage for when you may want to refinance or request additional funds.

    And no we didn't allow for any interest rises. We just go with the flow.

  7. #7
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    For our first one we had about 10% give or take.

    For our second one we used the equity in our existing property so didn't have anything in cash except stamp duty.

    For our current one we had 10% cash plus the cash for stamp duty and then used equity in existing property to get us over the 20% threshold for not getting mortgage insurance. We kept another 10% aside to pay for all the early stages of our renovation.

    We haven't ever had interest only - it didn't make sense for us plus we tend to treat mortgages and forced saving so prefer to pay as much off as we can. I think interest only tends to be best for strictly investment properties.

    We have been conservative in terms of allowing padding for interest rate rises but wouldn't enjoy an extra 8% at all!!

    We got approved straight away with all of them. The first time we got pre-approved. The second we didn't get officially pre-approved but had run it by our home loan person and were confident enough to make an offer based on the figures she did for us. This time we just told them how much we needed and they made it work for us.

    The only complication I can think of would be making sure you keep money aside for renovating that needs to be done ASAP.

  8. #8
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    Quote Originally Posted by NancyBlackett View Post

    We have been conservative in terms of allowing padding for interest rate rises but wouldn't enjoy an extra 8% at all!!
    RIGHT?! There would be much sulking here.

  9. The Following User Says Thank You to Pina Colada For This Useful Post:

    NancyBlackett  (18-09-2012)

  10. #9
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    Did you have 5% or 10% deposit?
    Neither. When we bought our first place we borrowed 100% of the loan amount (though I don't think this is an option now). When we decided to buy another house, we sold the first and used the equity we had as the deposit on the new house (we put an offer on the house with condition of sale of our house). When we decided to buy the house we now live in, we kept the second house to use an investment, so we were able to borrow against that to use the equity to count towards deposit for this house.

    Did you pay interest only to start?
    No, we've always paid slightly more than we need to. Until we had an investment property, about 20 months into having two mortgages, we decided to swap the investment property payments to interest only.

    Did you allow for an 8% interest rise just in case?
    We allowed for interest rates of 12%, just to be sure.

    Did the bank approve straight away?
    Pretty much. My BIL is a mortgage broker, so DH went through him (obviously no "special treatment" or anything), pre-approval was done within a day or two then it was just finding a house, having an offer accepted and all the building inspections etc done.

    Any other loopholes/complications?
    Not for us, no. All 3 times have been smooth sailing and hassle free. There have been small hold ups due to waiting for contracts to be sent and signed, gathering all necessary documents (pay slips etc) but other than that, it's always been fine.

  11. #10
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    Did you have 5% or 10% deposit? I had 5% and the only way I could get a loan was with my parents being guarantors and using their property as part security over the loan.
    Did you pay interest only to start? No I paid principal + interest, however the principal being paid off was negligible at the start.
    Did you allow for an 8% interest rise just in case? No, I have regular decent payrises at work so I knew that as interest rates rose, so would my income, so I knew that unless interest rates jumped a few% straight away (which seemed unlikely) I would be fine.
    Did the bank approve straight away? It took a bit longer because of the guarantee - they had to value both the house I was buying, and my parents house, look at their payslips as well as mine, etc.
    Any other loopholes/complications? I had to get an extension for the time to pay the deposit in my contract of sale to allow the approval to go through as it took longer than originally sought, but apart from that everything was fine.


 

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