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  1. #21
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    Default First home, deposit? How much do you REALLY need?

    We only had 7% but remember the 7k fist home owners most likely will not be enough to cover all your fees. We were still out of pocket about 2k I think.

  2. #22
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    Quote Originally Posted by Happy2be3 View Post
    But see, thus is why it's confusing.... One pp had a loan of 300k and had 420 repayments.. The other had a 220k loan and had 450 repayments.

    Reason we havnt been to a mortgage broker yet is because, well, we don't even have 20k saved yet but will in another 12 months and will have a more stable career by then too etc etc. But yeah, I havnt been to see them because I suspected they would just spin me a load of crap just to get me to go with them blah blah blah
    Check out

    https://www.moneysmart.gov.au/borrow...dit/home-loans

    which is a government-run website that gives independent advice

  3. #23
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    Quote Originally Posted by Happy2be3 View Post
    So, we've never owned a home, don't know a thing about it. We will be in a position in a years time where we will have a 20k deposit saved. How much do we really need? Will that be enough to purchase a pre existing modest small home in the outer suburbs of Brisbane?

    All the people I know have $650 week repayments on their mortgages... We simply couldn't afford that.

    Tips please?
    At least 20% deposit is advisable. I have read several books on property investment and all say the same.

    I still have yet to purchase property as unless I have a huge deposit, then I can't justify paying (likely) over $1million for a $300000 property over a 30 year period due to interest. Plus I think property prices in Australia have reached ridiculous levels as Aussies are obsessed with owning property and foreign investment drives prices up too high.

    But as I get older I'm starting to think about it.

  4. #24
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    Quote Originally Posted by BlackEyedPea View Post
    At least 20% deposit is advisable. I have read several books on property investment and all say the same.

    I still have yet to purchase property as unless I have a huge deposit, then I can't justify paying (likely) over $1million for a $300000 property over a 30 year period due to interest. Plus I think property prices in Australia have reached ridiculous levels as Aussies are obsessed with owning property and foreign investment drives prices up too high.

    But as I get older I'm starting to think about it.
    I think it's more like around $650,000 in total for a $300,000 loan. That's if you make the minimum repayments - paying a bit extra can have a huge impact on reducing the loan term and total interest.

    Imagine you rent for 30 years, average rent over that period is $350 per week. That's $546,000 in rental payments and at the end you have absolutely nothing to show for that money. And you've been at the whim of landlords the whole time!

    Of course you have to factor in other costs of home ownership as well - rates, other fees and charges (parks, sewerage etc).

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    Default First home, deposit? How much do you REALLY need?

    Haven't read all the responses but we just got pre approval and we have 15% deposit. Which means we have to pay around 4000 in mortgage insurance which sucks but we are continuing to save whilst we look for our home, and once we do get the loan we will be paying it weekly and also as much extra repayments as possible to reduce interest. That's the best way as far as I can see it. Also we will split our loan under fixed and variable as the fixed rate we were offered is 5.3% - I don't think it will drop much more within the next 3 years that we would secure that.

  6. #26
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    Quote Originally Posted by shelle65 View Post
    I think it's more like around $650,000 in total for a $300,000 loan. That's if you make the minimum repayments - paying a bit extra can have a huge impact on reducing the loan term and total interest.
    Well yeah, but that's why I say it's best to have a higher deposit... Because too many people scrape together a small deposit and think they can afford a home loan based on the fact they can make the minimum repayments. But unless you can afford more than the minimum repayments (especially in the first 5-10 years of the loan term) then you will be paying significantly more in interest.

    I wouldn't want to put people off so much as property is almost always a good investment, but I do think too many people get loans they really can't afford. And I think 100% loans are an incredibly bad idea. But that's just me.

    And yes, that's why I'm now looking at home ownership - due to rents being so high now. Property and rent in Australia has risen out of control and disproportionately to income

  7. #27
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    Quote Originally Posted by BlackEyedPea View Post
    Well yeah, but that's why I say it's best to have a higher deposit... Because too many people scrape together a small deposit and think they can afford a home loan based on the fact they can make the minimum repayments. But unless you can afford more than the minimum repayments (especially in the first 5-10 years of the loan term) then you will be paying significantly more in interest.
    Yeah but overall it's comparable to what you would pay in rent, but some of the money is invested in an asset, rather than the landlord's asset.

    Hehe I'm one of the suckers who had a tiny deposit and could just afford the minimum repayments, but perhaps my situation is different as I have had a couple of significant pay bonuses and have paid an extra $10k off.

    I haven't done the calculations as to whether I should have held off two years and saved the difference between rent and mortgage as I know I probably would have been better off if I had done that and been able to buy something way better now... but in that 2 years I have had my very own house that DD and I can do whatever we like with and that has been priceless!

  8. #28
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    Quote Originally Posted by Happy2be3;6871738o
    All the people I know have $650 week repayments on their mortgages... We simply couldn't afford that.
    That's really the only thing that stood out for me in your post. I think if it's going to cause financial stress, it might be better to wait until you're in a better position, when kids are in school and you're two income family if need be.

    I do believe it's ok to not have 20% deposit, but if the repayments you can just scrape by I don't think it's a good idea. Imagine if things changed and you had to give up your house

  9. #29
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    Default First home, deposit? How much do you REALLY need?

    We payed $360,000 for home in march. We needed $62,000 deposit to make our repayments $440 per week

  10. #30
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    Having a good deposit is a great start but i think what is more important is being able to pay off the house without financial strain.
    I had a bit under 10% for a deposit when i bought a house but the main factor, for me, was finding a house that we could honestly afford - which meant our budget was quite low and finding a house was harder - but we have been able to pay off much more than we need to without feeling any stress or worrying how we will make repayments. It's a modest house but it's a start and i love it.
    I guess the point of my rambling is don't buy a house unless you can afford to pay it off comfortably (and preferably above min. payments), don't worry so much if your deposit isn't huge.
    Last edited by MothersMilk; 24-10-2012 at 10:34.


 

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