how did you/how would you do it or any tips/suggestions
DH doesnt exactly have what you would call stable work it's a months contract in a shearing shed which does work for us as i dont know when i will need him home etc but I'd love for him to be able to get another 1-2 contracts although the seasons nearly over so soon we will be back to dole and partnered parenting payments with rent and all our bills on top of that.
I'm absolutely sick to death of renting, we rent from my MIL and pay through the roof she refuses to reduce rent (which in all honesty yes she doesnt have to but if i saw my son struggle and this money was just my play money which it is to her as well as her other 2 rentals id reduce the rent) and nothing gets fixed around here unless DH does it and pays for it 98% of the time.
I want to own at the end of the day its more security providing we have the money for the payments etc.
Now I've looked into it the houses we are looking at are around $300,000 thats for 3-4 bedrooms plus study and acreage.
So deposits are usually 10% right? So we would need to save $30,000? Then we get $7000 for first home owners and a property in vic of that price has stamp duty of $12,500 so just to begin with we would need $42,500 right? or does stamp duty get added to your mortgage?
Based on these payments (and us only having a $10,000 deposit which we dont even have yet we would need $942 a fortnight for the mortgage which is actually quite good we pay almost $600 for the rent so its not too much more)
So finally to the point, what do you need to get a mortgage - credit rating, finances, employment etc
Also how can we save? I plan to go to work full time when the twins are approx 6 months old and DH is going to be a SAHD he really can't do too much work with his back (hit by a car 10 years ago at 80kms whilst walking, hes lucky to be alive let alone working!)
If we are both on centrelink for a while its going to be nearly impossible to save, or is it?
We plan on putting the majority of the baby bonus into the deposit after all this is for the kids security as MIL has made it clear she doesnt need a reason to kick us out when she feels like it and wouldnt be bothered if she did.
I need as many saving tips as possible as many ways of making every dollar count, living as cheaply as possible without making my kids suffer.
Firstly your MIL sounds like a *fabulous* lady... NOT!
I don't have any advice on the saving for a deposit, I'm in the same boat I would LOVE to have our own place.
BUT I do have advice on living on centrelink.
IF we crack down on spending on stuff that is a luxury we can bank minimum of $50 a week.
I have my bills allocated a week in the month they need to be paid, it's the only way I can keep them paid and food on the table.
For eg.
Week 1 - DH's cc, leco & layby's. - I have just paid off DH's cc, so that money will be moved into paying extra on the other ones I pay on week 2.
Week 2 - My cc, overdraft, leco & layby's
Week 3 - phone, leco & laybys
Week 4 - [all going good] is only leco & laybys
Rent is paid fortnightly on my bigger pay week, however I would dearly love to be able to get it back to weekly.
I know $50 doesn't sound like much. But when you are living on such a low income it is a massive amount.
And it will add up eventually. And when you can add a little more do it. We have a change jar all the change goes into after shopping day is done. That gets banked too. It's amazing how much $$ you can have in change at the end of the day!
thank you so much miss cinders i really do need to work out a budget seperating everything similar to you do but its so hard when you are already behind companies dont seem to get the daily struggle (i see where they are coming from too we have the services its our responsibility to pay for them) luckily we dont have credit cards and went to prepaid internet so we arent obligated to pay monthly and its so much cheaper but we do have things like austar not a nessesity but i cant seem to let go ... yet!
We have just started the change jar ive been keeping a tally off it and it is slowly building theres about $9 of just 5c pieces in there!
Hi mrsS. My sis just bought a place and because they were first home buyers they didn't have to pay as much stamp duty. It was $2000 instead of $12000. Something like that. Also, they were able to buy with a very small deposit ($10000 I think) and they just paid mortgage insurance. I would look into your options. It might not be as difficult as you think x
If you can see a financial councellor they can get in contact with the companies & work out a plan for you. A FC doesn't cost anything [unlike a financial planner who costs an arm & a leg!]. That was what helped us when we got in a huge hole afew years back. It made a world of difference and we were able to catch up and stay on par from then on.
Getting a budget organized is a necessity especially after you've bought the house. Saving can't happen unless you are willing to let go of some non-essentials but don't go overboard. You need to live a little sometimes too. Be realistic. We have a mortgage and I have all our expenses listed in a budget. A weekly amount goes into a separate account for expenses and by the time the bill arrives the money is there waiting. You can get some great budget templates off the Internet that do all the calculations for you. My sister uses the one from David Koch off sunrise. HTH! x
One really good tip is to live now as if you are already paying your mortgage and put the extra money you would be paying into your savings - that way you know for sure that you can afford the mortgage and while you are doing it you are saving for your deposit. So you need to be banking $342 a f/n for a year and you will add $8892 to your deposit plus any additional money you can spare.
I also agree that you need to do a very detailed budget covering all incoming and outgoing money - you will need to add things like rates, repairs etc to your expenses when you get a place so it would be good to save for these too.
Well with your savings (10k) and the baby bonus also the same amount $20,000 puts you with a better base deposit...
Coming from a real estate family... It's better to have a bigger deposit and I think the stamp duty is reduced or free on first home buyers homes, I'm not sure if there is a grant though anymore...
Home advertised price is ale ays higher than they will accept. So if you look at a place for $300,000 you would make a first offer of 265,000 and it would probably be accepted. Keep this in mind when looking, you can always negotiate, and you'd be surprised by how much
mmmm saying $342 a fortnight more isnt that much more... IT IS, its almost an extra $700 a month and thats without more interest rate hikes, do you have that spare at the moment? its heaps more darl, sorry i dont want to be a downer on this but servicing a $270.000 loan isnt easy, remember there is also house abd contents insurance, rates, bills etc... if something major breaks you have to pay for it.
Can u speak to your MIL about doing a deal with her to buy the property you're in by paying her what your paying now in repayments?
I find the best way to save money, is to commit mentally to ONLY buying new things when absolutely necessary. It's simple, and maybe you already do it! But I buy as much as I can secondhand (whether from op shops, on ebay, at markets etc), and I have saved a small fortune by doing that over the years! Also, with stuff for the pantry, I buy in bulk rather than small packets.. also a big saver. Grow some veg too?
See if there is a Freecycle group online in your area - another great way to get stuff you need and save money - and to get rid of stuff you don't need.
Maybe you could swap kids clothes (or yours) etc with other Mums in the area? Just a few suggestions.
The other general suggestion I would make is that if there is nothing tying you that particular region, there may be properties which tick all the boxes for you in a slightly cheaper area. We moved to a fairly remote (and beautiful!) area partly because it was so affordable. Now we work to live instead of living to work
As for your MIL and living in her house... I would be moving out and paying someone else rent until I could save to buy! She sounds like hard work. and best of luck with all your plans.
I don't want to be a downer hun, but I think you might have a way to go yet. You also need to factor in legal costs which add up, and of course moving expenses. At best you could probably borrow 95% of the value of the house, but 90% or less is preferred and of course under 85% you don't get hit with mortgage insurance. If you are looking at 95%, 5% of $300 0000 is $15000 plus you will need to come up with at least enough extra to cover legals, stamp duty, pro-rata rates, moving expenses, costs for things like pest and building inspections, building insurance, preferably contents insurance, and you do usually need to make your first repayment in advance. So I would say at least $30 000 to make sure you have enough. Plus the lender will want at least one of you to have a stable, secure job, and you will need to demonstrate a savings history. Even if you were lent $30 000 it is unlikely that you would have a mortgage approved without being able to show your ability to put money aside each month.
Is renting from someone else for a while an option? Or could you ask your MIL if you can go on a rental contract like you weren't family, so that she is liable for the cost of repairs that are not your fault?
If you are already behind in your bills, it is going to be very difficult to budget to pay $342 more a fortnight. That's an awful lot of money on a casual wage,/Centrelink especially with four kids.
And banks aren't scared to force you to sell up. If you don't have the equity in the property, then they can chase you for any money that you owe. So if you make a loss on the house and then owe say $25,000 (not unrealistic) then you have to pay rent, plus the repayments on that $25,000, plus your credit rating is wrecked.
In your situation, I'd save save save, but also look at renting somewhere else for a year or so, to get out of the whole issue with MIL. The idea of putting aside the extra $342 minimum each fortnight is great, plus $20 per week in rates and $100/month in building/contents insurance. It all adds up, unfortunately.
The only other thing I could think of is, do you HAVE to live in the area where the houses are $300K? Can you move to the country where some houses are as little as $55K (country western Victoria?) This looks much more achievable from your budget perspective, you'd pay off that $55K very quickly with a small deposit and paying the amount you are paying now in rent.
hun we've just sold a house because the financial strain of only one person working was killing us. we were in deep doo doo and the options were either for us to sell or for someone to sell out from under us. with both of us on c'link for a while, and paying only 270 a week on the mortgage, it was damn hard. yup, you'll get more FTB than I get cos you have more kids BUT, you have to factor in, long term, the expense of those kids. while they're little it's fairly simple. they don't have extra curriculars (your eldest will probably have them soon), they don't have expectations of what they will wear in terms of clothes and things. adding 342 a fortnight to your budget without even factoring in the rates and things like that isn't easy. keep in mind you will lose c'link rent assistance (which is probably about 135 a fn a moment), your c'link payments will change with you returning to work and DH being the SAHP - at least until the end of the current financial year because he has earnings. unless you're working full time and bringing in a taxable income of less than 1480 a fn, he won't qualify for parenting payment which means you'll only have ftba and ftbb, no ppp and no rent assistance. you're looking at not only having to add 342 to your outgoings on top of the "rent" you pay now, but also losing 135 ish in rent assistance - can you really afford to take 470 extra out of your living budget totally? you're not going to even get that much extra in ftb once the twins arrive (no more than 320 ish if you're on max ftba) so can you, now, take an extra 150 out of what you have immediately and pretend it doesn't exist? that's without the extra costs taken into account (land and water rates)
DH and I had to make the call to give up on the dream of home ownership for the time being. we're being realistic. having a rental isn't ideal, but it isn't the end of the world. you need to either get tough with MIL and get a proper lease/tenancy agreement or you need to find a rental with a different "landlord". the reality is that, even if you can put the full baby bonus for the twins into savings, taht's only for six months. any mortgage is going to need more savings history than that. can you continue with it after the babies are six months? are you guaranteed work at the six month point?
like the others, i don't want ot be a downer on your dream. i have just been on the other end where it went belly up due to illness/loss of employment. we HAD the dream and we lost it. we're barely breaking even leaving that house and to be honest, i feel physically, mentally and emotionaly exhausted from the effort. and i HAVE secure work, i'm on a good wage - it just wasn't working out.
also, just as a word of advice - i would be VERY wary of any "institution" that allows you a large mortgage when one of you is on income support payment (ppp) - unfortunately many will let you borrow far more than they should and you are left in the crapper. i have looked at the calculators. they calculate it at a ridiculously high percentage of your income. run your estimates as if you're both out of work, or at least you only being part time and DH being at home. don't factor in "maybe" income for him on one of these contracts. factor in that money you are guaranteed. and put the mortgage percentage up at least two percent and see if it's still viable (all advice i was given when looking at buying fresh into workforce
thanks everyone for your suggestions and i dont think a lot of people really got what i was saying i wasnt saying we were running out and buying a house straight away our goal is 3-5 years time when i have a full time job, plus my business on the side and DH does also work but its seasonal and he has another job when the off periods.
Moving costs dont cost us a thing the great thing about DH being a furniture removalist we have never had to pay to move.
I'm not being defensive here im just getting my point across that it is actually realistic with our time frame etc.
As for MIL we are already on a rental contract we have a lease with a real estate, rent gets paid to the real estate etc but MIL still refuses to fix things if we go to VCAT we are out on our asses and i dont want my kids to have no roof over there heads, as for renting somewhere else that would be too difficult in the area we are in there are only 7 rentals within the district one being here with it being rural it doesnt leave much and we dont want to leave the are DD1 is settled in school, DHs job is only 5 mins down the road etc.
Right now whilst I am on centrelink payments and DHs contract for this season is near the end (hes not doing his other job until after the twins are born he wants to be home to help me out) yes it is impossible which is why we arent running out and buying but asking for tips and advice on ways to save so when that time comes in a few years we can say ok we have well over the 10% recommended deposit we are hoping to have around 25-30% which yes is a lot but can be done and thats all i was asking for was help on how to achieve this over a period of a few years
Anyway sorry for rambling sooky kid and heat dont mix today
In 3-5 years time you really can't imagine what house prices will be. It's a great goal, home ownership, and I'm sure you'll get there if that's what you really want.
Deposits should be more than 10% - especially post GFC. The barefoot investor said about 3 weeks ago that for a $300k house you need about $85k for deposit stamp duty and fees. That's a lot.
You will need a very very good history with credit ratings and a good relationship with a bank in order to get a house with such tight margins.
As for saving tips - there are loads out there. But firstly, before you start looking for ways to save - you need to know what you are spending. If you don't know exactly where the money is going, you will never know what you can save on.
every fortnight our money gets written down for where its going and what on etc so we actually have a very good understanding of our money
i just dont get it why does everyone seem to think the average person simply cannot afford to buy a house we know our money well, we want to save as much as we can, we have good credit and i have a fantastic relationship with my bank who cant wait (and this is the words of the bank manager) to give us a loan ..... oh well .....
Nothing like a cuddle from DD after a hard day's work!
Oct 2007
in my own world
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MrsS, I think you got your heart set out owning a home and i think that is a great start!!! Having a goal in life is always good and I do agree with you, sometimes people get too scared from the thought of owning your own home, but I think once you are in a mortgage, your standards of living and expenses will adjusts to cater for that.
I also think it is good to have a back up plan though for the worsest worse case scenario.
Best of luck and hopefully your dream home will be yours soon =)
how did you/how would you do it or any tips/suggestions
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and best of luck with all your plans.
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