My Intro to Debt consolidation to now saving for a deposit.

Discussion in 'Introductions' started by jcomp6, 3rd Jul, 2018.

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  1. jcomp6

    jcomp6 Member

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    Hey all,

    After going through a plastic phase with a careless attitude from 18 - 25 I hit a rut where debt was growing from credit card interest rates faster than I could repay.

    Fast forward to October 2017 I was speaking to fellow work colleagues about overtime offered at work for each Sunday, RDO's and public holidays and decided enough is enough, I need to get serious pay all debts off and work towards a house deposit.
    To put it as an example my take home salary is 60k with 12 hour OT on the above I can now sit around 117k before tax, my debt was roughly 18k and I had put all my credit cards into one consolidation loan.

    April 2018 and I had paid my consolidation loan off and started for once in my life actually saving money :eek: around this same time frame I have started listening to the property couch podcast and it gets me excited working towards the goal of buying a house one day in the near future.

    I have so many questions regarding buying my first place it makes my mind go crazy daily.

    Should I see a financial planner or should I see a mortgage broker ? I'm hesitate on the mortgage broker as I feel like I'd be wasting their time?

    Also should I look to get into the market sooner rather than later and pay the LMI for potential equity gains? given the housing market in Melbourne is on a bit of a decline? would be looking to buy 1 hour via train to the CBD (too expensive elsewhere)

    Any help would be fantastic!

    Regards,
    Jordan
     
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  2. hammer

    hammer Well-Known Member

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    Congrats on turning the ship around!

    Which city are you looking at buying into?
     
  3. jcomp6

    jcomp6 Member

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    Honestly wish I did this years ago instead of so recently......

    Will be looking to buy and live in Melbourne or possibly Geelong (possibly Geelong more bang for buck)
     
  4. hobartchic

    hobartchic Well-Known Member

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    Sounds like you are doing well. I would take my time, learn from your previous mistake of relying on debt, and save up a 20 per cent deposit. It gives you a buffer if life gets rough. Slow and steady. Keep your focus on saving rather than spending, or you will end up in trouble again.

    The market's still bubbly, so you can afford to wait twelve months or so.
     
  5. Brady

    Brady Well-Known Member

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    I would suggest speaking to a decent banker/broker.
    I decent one will give you the time of day and run through some info that I'm sure you want to know based on...
    - your income what is your affordability
    - different purchase prices what your purchase costs and deposit required will be
    - different borrowing amounts what will be your Lenders Mortgage Insurance (LMI) if any
    - loan amounts what will your repayments be

    Knowing these will only further help you set goals and be more emotionally inclined to save.

    Once you know what you can afford you can dive closer into what markets you can enter
    Then start doing some research on the properties in these markest
    Ideally when the time comes that you have the deposit you will be ready to make an informed decision.
     
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  6. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It's fantastic that you've gotten focused, reduced debt and started saving a deposit. These days all you ever hear about is it's impossible to get into the housing market. That's simply not true and I think you'll be living proof of that statement.

    Right now my heroes are a couple that spent over 2 years saving a deposit. They house sat, boarded with friends, cut every expense they possible could to get the money they needed. They actually smashed the deposit they needed and moved into their new home about a month ago. They mentioned that their first repayment was so easy because they're used to saving far more than the mortgage cost.


    Don't worry about wasting a brokers time, it's not a waste at all. I'm sure I speak for many of my colleagues in saying that spending a bit of time to get a good understanding of what you need to do to achieve your goals is far better than trying to fix a problem after a purchase has been made.

    It's actually fairly rare that I meet someone and am setting up loans for them immediately. The first time I meet most people they simply want to understand what they can do and what they need to do to get the outcome they want.
     
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  7. MWI

    MWI Well-Known Member

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    As you set the goal to start saving the next goal would be to educate yourself on investment into real-estate or on finances. Set a goal to read 15 minutes daily just on that for a year then the knowledge will lead into less confusion and hence easier to make decisions forth..
    Also search and read recommended materials on this forum on investing in RE...
    Yes, broker would be recommended to see first if you wish to be an active investor into property as they can establish how much you can borrow in order to buy, this is required before looking what to buy, as financial advisors mostly recommend the products they sell (only very few into direct property and could be biased - only opinion not a fact before I get attached!).
    You need to decide what you will invest into first, will you be a passive or active investor?
     
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  8. jcomp6

    jcomp6 Member

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    It's a strange feeling having no debt and savings, I pinch myself with each paycheck coming in and my savings growing (plus a small 2.8% interest)

    My lease still has 19 months to go so I wasn't planning to buy until this time frame :)
     
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  9. jcomp6

    jcomp6 Member

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    Your Heroes pretty much sounds like my situation at hand, albeit 19 months to hopefully get a deposit.

    Is there a website that shows independent brokers or do you have any recommendations for anyone in Melbourne?
     
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  10. hobartchic

    hobartchic Well-Known Member

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    Good. Keep at it :) . Saving can get boring but better to bored than stressed out.
     
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  11. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Saving that first deposit is a huge task. It took me 2 years as well to get there (a long time ago, when we lived in cardboard boxes, walked 20km to school in the snow with no shoes, ate spam and we were grateful !!!) ;)

    I am a broker in Melbourne. There's also @Medine and @tobe, both are excellent, with a lot of experience. There are a lot of good brokers on this forum, it's the sort of environment where bad brokers get called out fairly quickly. Read the finance section of this forum to get a feel for the info being given.

    There is no website that shows 'independent' brokers. Virtually all brokers receive a commission from the lender (which we're all happy to disclose, there is no evidence to suggest that this creates a conflict of interest). As such we're not legally allowed to use the word 'independent'. You also need to consider that comparison websites aren't 'independent' either, because they're paid by the lenders or brokers they're recommending (and they don't make fair comparisons either).
     
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  12. jcomp6

    jcomp6 Member

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    Thanks for the information Peter, I'll check the finance tab out, I've got a nice little holiday coming up in the next month, then it's back to super frugal mode!

    Sounds exactly like the glorious electricity with the comparison websites :rolleyes:
     
  13. Brady

    Brady Well-Known Member

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    I would speak with @Peter_Tersteeg if you're looking for a broker in Melbourne, I'm a banker... so we don't normally like brokers... but I would still highly recommend Peter :)

    Best of luck with it all - it can be a great feeling getting into savings mode, start getting emotional satisfaction from savings instead of spending the money.
     
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