FHB serviceability question

Hi Guys,

Longtime lurker first time poster. I'm a fhb getting ready to make the plunge and speak to a broker and I've noticed many on here too.

My situation at the moment

-75k wage
-married 2 kids
-250k savings

I'm considering getting a loan for 350-400k so looking at places in the 600-650k bracket. Online calculators see to vary in whether this would be servicable or not. Just looking to see if any brokers had an idea about loan approval.

Personally I believe the market is at a tipping point so tempted to hold on for longer and increase savings but I'm not getting any younger and that is another discussion anyway.

Cheers,
Jon

 

Welcome Jon

A lot of good brokers here - check the services directory.

Get the loan set up with an offset. So borrow as much as you can without large insurance costs and then put your savings into the offset.

It helps with the tax later on if you turn it into a rental.

 

Hi Jon and welcome to the forum.

It’s impossible to tell you any kind of borrowing capacity with minimal information so you’re best off choosing a broker and getting a specific figure - there’s a lot that goes into it.

You’re right in regard to online calcs - they’re not much more than a marketing tool and shouldn’t be relied upon.

You can’t go too far wrong with a broker from the forums.

 

Based ONLY on this data, assuming there's no other income, credit cards, personal loans, the income is accurate (it often isn't), you've got a borrowing capacity of about $250k.

Assuming you're in a state where the stamp is waived for FHBs, this would give you a purchase price of about $500k.

There's a lot of assumptions in here, mostly optimistic ones so the borrowing capacity might be quite a bit less. On the other hand, you may be receiving additional income that hasn't been disclosed such as Centrelink, which would increase the borrowing capacity.

You need to speak with a broker to actually do a proper analysis using the facts, not assumptions. Online calculators are complete rubbish, they're designed to get you to call the banks and are only a marketing tool.

 

Hi @jon88

That's a good deposit for a FHB

Something we come across with First Home Buyers is that whilst they may be doing well with their income, and may even have funds left over at the end of each month, the challenge is that now banks assess you on 7.25% principal and interest repayments, and also override your living expenses - often based on the number of family members, tied into income and post code - this varies lender to lender.

Best to get advice specific to your circumstances, needs and goals.

 

Great work with the savings Jon. As mentioned, don't waste your time with those online calculators. They are very inaccurate. Only a broker/banker can tell you with reasonable precision your borrowing capacity.

A broker can go one step further and discuss your medium to long term goals too in regards to strategy if you plan to invest further in property. Don't forget to read up on your state's concessions and grants (if applicable) and how that might impact your planning.

 

hi @jon88, it is a smart move to join PC and ask questions, like the above posts stated, there are many variables coming into play when assessing your borrowing capacity. any broker on PC will be able help you formulate a strategy ( rather than finding you a loan)