We had put off buying when we were younger because we knew there was no way we could save that kind of money. Now it seems we still can't
I guess we will save anyway. It's not like we haven't been trying, it's just things are so damn expensive. Especially LTTC. May have to make some massive decisions......
I recommend reading Barefoot Investor do help you learn to save. Tackle the problem in front of you. Save now. If you get pregnant, then you can evaluate your choices then. If you don't, then you buy a house or blow it all on a round the world trip. Things may also change in the job market. You could both get a second job in the meantime, reduce costs...there are options. What other people do is their business. We rented for years before buying.
The bigger your deposit and that you have genuine savings, the more likely you are to get a loan. Use compound interest to your advantage. Save the money into a high interest Internet account you can't touch. If it's going to take you 4 years to save, then take advantage of the first home buyer savings account. The government tops it up. You can only use the money for a deposit though.
Prices may go up or down in that time. So imagine you are buying a house for $300k. You want at least $30k for the deposit. You also need to pay stamp duty, say $10-5k, bank fees, transfer fees. We recently spent $2500 for a brilliant property lawyer who's advice saved us money on the house. As you're borrowing less than 20%, you need to pay mortgage insurance. This is not actually an insurance, it's a fee to the bank to cover them on the risk you can't pay the mortgage. It may be the bank will add some of the fees to the mortgage rather than take them as cash (which you'll pay interest on so try to avoid that if you can). So all up you may be borrowing $285k against a $300k house. so work out the repayments on that, assuming an interst rate of about 10%.
If the first home buyers grant is still in when you buy, you may get something back for it. Currently it's $7k for an established house. If you buy a new build, you get $20k. We bought an almost finished new build without having to deal with long repayments on a house and land package. Whilst we had to pay more stamp duty, that was offset by the $20k. After various fees, we netted $900.
My maths isn't accurate, but you could probably access a $300k house if you save $40-50k. That's about $150-200 per week for the next 5 years, not taking into account interest earned. After tax, could a second job net you that? You could have it paid straight to your savings account. Even $50-100 a week would make a difference.
If that still seems daunting, look further out or consider buying a small house or apartment.
Thank you for all your advice ladies
LionsandBears, we are hoping to put more in and save quicker so we can take advantage of the reasonable prices at the moment. Weather or not they are still good in 18 months time is anybody's guess though.
And we can't get the first home buyers because DH bought a house for $40K about 15 years ago He separated from his ex and sold it after only 2 years and made no profit. It sucks that because of this we can't get it.
I saw the bank this morning and they were great. They worked out an estimate for me for a $280K house. We will need (worst case scenario-her words):
$34K deposit, which can be saved over 18 months at $435 a week (tight, but should be doable for us)
And our mortgage repayment will only be $378 per week. That sounds totally doable for us
Sounds easy, but I know it will be much harder than that. Especially if I manage to fall pregnant. DH is prepared to work weekends whenever he can to get extra $ too.
Last edited by Marley&Me; July 5th, 2012 at 03:30 PM.
Thanks N2L, the extras included were all the bank fees and all the government fees. We will just keep saving and saving and having no life in the process
Oh N2L It's so crap that IVF is so expensive. I would have definitely started it if it wasn't. But I shouldn't speak too soon, I may still need it.....
It will be worth all the effort in the end. Hopefully you will get the house and the baby xxx
you might have to sacrifice location, and get something smaller than you'd like (we're in a 3 BdR unit in Hampton Park - would sell for about 330 - 350K now...) - but in the end, having your own home is a nice feeling .
Thanks myturn, our suburb is growing, but it is still cheap because there are still old parts. We will only buy something older anyway because we need a big backyard!!
Would your DH consider having the house in your name only but the loan in joint names - that way you might be able to qualify for the first home owners grant?? Just a thought
Sounds like a great idea, but I don't think it works like that from what I've heard you can't get a house loan in two names and then buy the house in one name.
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He separated from his ex and sold it after only 2 years and made no profit. It sucks that because of this we can't get it.
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