ok, so we want to start saving for a house deposit. starting after xmas, when our BB installments stop, and we have to re-evaluate our income & budget. for the time being, we're just paying the bills and getting me started with my WAHM venture
We need an account that we cannot touch, for say 3 years? i would be making fortnightly deposits, and also considering depositing the money i make from WAH, which varies depending on how much/what i sell (its all craft stuff)
how much is considered 'good enough' i understand that the more we have, the less we have to borrow. we wouldnt want much more than $300,000, if that. from my calculations, and if we stick to it, we would have $7000 in the 3 years. would that be enough to go ahead with applying for loans?
It depends.... Most paces expect a 10% deposit but it depends how desperate the buyers are to sell and whether or not a bank will let you go ahead. Up here it's a 3% deposit in Canberra but 10% in Yass... some people get away with 1% deposits... it really depends on the bank etc...
Also remember if you are borrowing more more than 80-90% (ie your deposit is less than 10-20%) the bank/lender will require you to pay lenders mortgage insurance. This is usually a few thousand depending on the size of the loan. It is not insurance that covers you, it covers the bank if you default on your loan.
Then you also need to fund stamp duty and loan application fees etc on top of your deposit, so don't forget to factor in that too. If you're a first home buyer though, you'll get the first home buyers grant (assuming it is still around then) and this could cover some of the costs and deposit.
Yep, it's 10% in WA for a bank to look at lending you money... UNLESS you have someone to go Guarantor for you that does have that sort of money or equity, then I think you can get away with having nothing saved up.
And yes, don't forget about the stamp duty fee's, loan application, settlement fees and all that other fun stuff! ><;
I've found that the banks are really cracking down at the moment, and unless you have 20% deposit - they're turning more people away than accepting them.
Hopefully in 3 years time, they will be back to lending you money with 10% deposit - 10% is good, you don't really want one to lend you everything as their interest rate is usually much higher than a standard bank, PLUS, if you were to refinance they chuck on a BIG penalty for you. SO you are usually stuck with it for at least 3 years before you can refinance - which can end up being a lot of money in wasted interest that you need not be paying IYKWIM?
When we got our first house - we had nearly 20K saved up, and we got a loan for 250K not a problem.
And yes, don't forget to factor in stamp duty and legal fees (including searches).
If you are serious about saving for a house and not touching the money then google first home saver account sponsored by the Govt. There are tax advantages and they also make contributions to your savings as well (which makes it grow faster).
we are doing the same thing ATM, we have been told by the com bank that to get a loan you need 10% deposit so if your looking at 300k then you will need 30k deposit, BUT if you have a exsiting loan or credit card with the com bank then you only need 5% deposit, so you would only need 15k... we got told the best thing to do would be get a credit card with them with a $500 limit , cut it up so that you dont use it... then after 6mths with the card you are able to apply for the loan and you only need 5% if that makes any sence...
but in three years the GFC should be over and the world should be on the up again so you might be able to get a loan with next to nothing again...
where to start? house deposit.
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