hi, i can offer some advice as we just went for pre-approval today...
DH is the only income earner and we have savings to cover 20% of the deposit (after we take out the roughly $26,000 in fees and charges like stamp duty). we are also first home buyers.
we found that in relation to last year (when we first started enquiring) the banks have become alot more conservative in relation to how much they lend. for us the amount dropped by $200K despite the fact that we are now earning more!
in all honesty though, we feel more comfortable with this. the low interest rate and the loan amount we are asking for means only a $100 difference a week between the mortgage and the rent. this time last year it was a completely different picture and threatened to really impact on our lifestyle ITMS.
so although it kinda sucks not being able to borrow so much, it is also a little reassuring to know that we feel 'safer' with the amount we have.
It shouldnt be a problem that your DH has only been working there for 6 months. they usually just want 3 payslips...so that time-frame should hopefully cover it.
Can someone explain the stamp duty and extra fees?
Where I come from they do not have stamp duty. You buy your house and pay only extra for legal fees (about $1000) . Are mortgage brokers in Australia free?
well in qld you dont have to pay stamp duty if its your first home.
you do have to pay for legals and other fees though, like pest and building inspections. mortgage brokers are a free service to you but charge a commission to the organisation/ bank you end up borrowing through. as far as i know anyway.
Salsa, stamp duty on transfer is a government fee and varies from state to state. From what I understand, in VIC you still have to pay stamp duty even as a first home buyer (in NSW you don't pay stamp duty if your first home purchase is $500k or under). The duty increases depending on the purchase price of the house. It is usually a good few thousand dollars.
Registration of mortgage is about $100 in NSW - I am pretty sure that's another govt charge, but can't remember.
Mortgage stamp duty is payable for some lenders. Some lenders waive this fee. It is often a few hundred dollars, but varies from lender to lender. Lenders will also have other fees, like an establishment fee or a settlement fee. Ask your lender or your broker to give you a full breakdown of fees when you are investigating which product would suit you best.
Lenders mortgage insurance (LMI) is payable when you want to borrow more than 80% of the value of the property. It doesn't protect you, it protects the lender. LMI increases as the amount you wish to borrow increases. [Hollo: $4,800 is annoying yes, but it's actually pretty conservative. I have seen people pay over $10k in LMI recently. It is ridiculous.]
I am not sure if all brokers in Australia are free. The ones I work for are: they are paid on a commission basis by the lender, and they disclose all those details to you if you decide to go ahead and apply for your loan through them.
If I were to buy a house (DH and I will look into it in about 5 years) then I would go through a broker.
ETA: Yes, you'll also need to pay legal/conveyancing fees. These can be $1,000-$3,000.
I know, Jess, these are rough times for saving. Quite a few of our clients are using family equity. You get an 80% LVR loan on the new house you buy, then you get another loan for the balance secured by both the new property and your parents' property. (Of course this is if your parents are agreeable, and the bank specifies that they have to receive independent legal advice. Plus, they need to have enough equity in their property to be able to help you out of course.)
I think its a bit too easy to get a mortgage at the moment... and i think it might lead people in to a false sense of security, because if they can only just afford repayments now with rates so low, what happens when they go back up??
When we bought our house we left a fair bit of room in the budget to account for rate rises, and bam, within the first 3 months there were a whole bunch of increases, lucky for us it was only about $50 a 1/4 percent, so ended up being a few hundred dollars more a month.
I guess banks figure if you can't save a deposit how will you pay more when interest rates go up?
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