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First home buyer and long time lurker looking for some advice

Discussion in 'Introductions' started by Bie, 10th Jan, 2016.

  1. Bie

    Bie New Member

    Joined:
    10th Jan, 2016
    Posts:
    4
    Location:
    Melbourne
    Hi all,

    Another lurker (also lurked on Somersoft for a bit) first time poster.

    My partner and I are preparing to buy our first home somewhere in Melbourne, and I have a few questions about what to do.

    As way of background, I earn approximately 100k p.a. and she earns approximately 90k p.a. excluding super. We only began saving recently and have about 25k in the bank. We are aiming to save at least 4k per month (hopefully more if nothing unexpected happens) until we have enough to purchase a property. We're looking to purchase a property around the ~650k – ~750k mark. A property below 600k would be great to get the stamp duty reduction but I'm worried we may have to compromise on location or the property itself to achieve this. This is something we’ll consider further as we continue to save.

    From reading other threads I understand 95% LVR loans for PPORs are still around and that some lenders allow you to capitalise the LMI on top of this. If so, for a 700k loan roughly how much would we need to have saved up front to cover anything? Is 10% a good guideline?

    Secondly, another thing I've learnt from this forum is that using a broker can be particularly beneficial especially when starting out. What I'm not clear about is what is the best point to actually engage a broker. Should we wait until we have enough cash saved and are ready to go, or does it make sense to approach a broker sooner? If so, what should we be asking/seeking at this point?

    Thanks in advance for any assistance and for creating the wonderful resource that is Poperty Chat.
     
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  2. monalisa

    monalisa Well-Known Member Premium Member

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    Location:
    Sydney
    Hi @Bie

    Welcome to PC.

    Given the recent APRA regulations, and tightened lending, 95% plus LMI capitalised has become much more difficult than it was a few years ago.

    It may be worthwhile discussing your overall serviceability with a broker, and then working backwards from it and putting together a savings plan. It is useful looking at the big picture, as there may be other strategies you could explore in line with your goals.

    Aim to save 15% at the very least (if going with 10% deposit). If you are looking to put in 12% deposit (ie 88% LVR - this LVR point tends to minimise Lender Mortgage Insurance), you will need 17% savings. ie 5% for costs such as stamp duty, solicitor, inspections etc.
     
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  3. Bie

    Bie New Member

    Joined:
    10th Jan, 2016
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    Location:
    Melbourne
    Thank you for the response, Monalisa, some helpful advice there.

    Are 95% LMI loans hard even for PPOR? I see RAMS still offers them.
     
  4. bob shovel

    bob shovel Well-Known Member

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    Are you currently renting? Or living with fam?
    I'm not sure what's happening with the melbs market but have you thought about ip first then ppor? Stick out renting for another year? The ppor wont help your serviceability

    Run it by your broker as an alternative scenario before you sign in the dotted line

    Welcome aboard!
     
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  5. The Y-man

    The Y-man Moderator Staff Member

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    Melbourne
    Go now and find out what your position at this time is etc.

    The Y-man
     
  6. Bie

    Bie New Member

    Joined:
    10th Jan, 2016
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    Location:
    Melbourne
    Thanks for all the feedback. Sounds like the best course of action is to find and speak with a broker. Having a look around there still seem to be a few lenders offering 95% LVR, but I'll have to figure out if one of these is appropriate.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    Welcome aboard :)

    95% loans are still possible but the LMI on that level of borrowing would be massive!

    Best to borrow no more than 90% - if you can get that down to 88% then even better.

    Cheers

    Jamie
     
  8. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Location:
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    An important question: What were you doing with your money before you recently started saving? :)
     
  9. Bie

    Bie New Member

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    Location:
    Melbourne
    Good question. We had quite a bit of debt accrued that came from moving country, moving state, various bills and buying a car. Thankfully none of it was bearing Much interest as I bt hopped it. Also our income in late 2015 relative to early 2013 has doubled, so we only started to have a substantial surplus (and given our career stage should hopefully continue to grow a bit more) recently. We also rent. If we don't have too many unexpected expenses we can put away about 5k a month at the moment.
     
  10. York

    York Finance Broker Business Member

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    Sydney
    Hi Bie. Welcome to PC. @monalisa gave some very handy advice above. Best to talk to a broker sooner rather than later. They can help you map out a plan and guide your next steps regarding savings and what is possible and suitable for your particular needs. There some great brokers here. @Steven Ryan is excellent. Give him a call. Always happy to chat.
     
  11. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Location:
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    Ok sure.

    With a bit more of a consistent savings history the banks will like the look of you quite a bit more so keep ferreting away that cash :)