Buying our first home

[Bridg]

So we have decided, that we would like to buy a house. Nothing flash. Something we can afford, and renovate as we go.

Our total income p/wk is $907 (with no rent assistance) which is from DH's wage and my Centrelink. We have been doing calculations on the online calculator things, and if we borrow $170,000 we are looking at around $250 p/wk in repayments. We currently are paying $240 for rent.
If we brought a house, we would lose $148 per fortnight in rent assistance.

Does anyone think this is possible? I have done my sums, and after living expenses, rates, water, insurances, etc, we are left with $82 a week.

CAN it be done?

[fionas]

The rule of thumb used to be no more than 30% of your income so on that basis you're fine but I'd factor in some interest rate rises too. There's plenty of people who pay more than 30% though too.

Good luck deciding what to do.

[AngelPunks]

I pay about 75% of my net income to my mortgage alone and it is really tight. I have no extra money for repairs (and there are a few that are desperately needed), rates/body corp/insurance etc also are all killers.

I'm fully supportive of people owning their own home, but there are hidden costs that you don't have if you're renting (like having to call an emergency plumber because you've got a burst pipe), getting a house that needs some major structural work done to it that was missed in the building/pest inspection.

Good luck with it, but I would seriously re-look at your numbers. Ask a mortgage broker for advice as well.

[*Ali*]

Another thing to think about is interest rate rises- we got hit with 3 interest rate rises in a row after we got our first mortgage last year, we hadn't even paid our repayment yet. For us this was fine, because we had budgeted on interest rates at around 7% not at the 4.9% it was when we took out the mortgage.

My suggestion would be to live on the lower amount for 12 months, and save the extra, then you will know if you can survive on that amount of money, it also means at the end of te 12 months you will have some extra savings in the bank.
I also agree with talking to a mortgage broker, they are really good, and can tell you about some of the hidden costs involved in getting a mortgage.

[Bridg]

Thanks for all the quick replies.

We were looking at fixing our loan, so we know exactly how much we have to pay each week.

I was also thinking of getting a $2k credit card for emergencies, like if the hot water service dies, or I need a plumber in.

I have a friend who is a builder, and I was going to ask him if he would inspect a property before we brought it.

I was also thinking of going and getting a job doing night fill at the supermarket on weekends, that way I'm not paying for childcare.

The mortgage broker I will be seeing (a friend of a friend) isn't back until Monday, so will give her a call then.

[Tanya]

Good Luck Bridg

[Bridg]

Thanks Tan. mwah.