RachelGreep Posted September 29, 2014 Share Posted September 29, 2014 We were talking to our bank about the ins and outs of getting a mortgage and buying our own place. Obviously they were very pro us taking out a 95% mortgage even though it means mortgage insurance and the fact that interest rates are likely to rise again sometime in the not so distant future. They obviously want their commission. Anyway, we had not realised just how much is required up front when it comes to fees etc. We though saving a substantial deposit was the hard part but now it seems that even if we save up a 20% deposit (unlikely at present) then we will likely need the same again to pay for legal fees and all the other cr@p that we had not thought about. For this kind of money we could have had a big detatched 4 bedroom house in a nice area where we used to live in the UK (I know, I know, I just mean we couldn't afford that kind of lifestyle before we left so we are a bit fecked now). How do people afford to buy a house? Are we just going to have to rent forever? I really can't see us being able to save up for a house where we want to live. Anybody able to tell me I am completely wrong and that I have totally got it wrong and that I was not paying attention? Also, does anyone know of the deals where you pay a typical rental price for a property that is newly built and then after so long you own it? I am wondering if the catch with this is high interest rates plus a very long term. Maybe you are still paying 80 years later. They are advertised like this on realestate.com.au http://www.realestate.com.au/property-house-vic-clyde+north-414125907 Thanks for any advice on this. For now we are better off renting as we could never afford to buy the house we are currently renting and then there are rates on top of the mortgage. Link to comment Share on other sites More sharing options...
janinewhiteley Posted September 29, 2014 Share Posted September 29, 2014 Hi Rachel Everyones situation is different. We are an older couple and TBH, if we don't get on the property ladder very soon we are going to be to old. We don't have a deposit, but seen lots of adverts for $3000 deposits on house and land packages in the northern suburbs. So we spoke with the finance team from one of the well know companies.( my OH is a sub contractor for them and get a discount- it all helps) ( one of the better companies) they said the $3000 deposits - they don't do but they do offer low deposits. Here is how it works. $400k house and land package. $20k deposit $360k on 4.84% interest rate (offset mortgage) (fixed term) the other $20k is on a credit card at a life time rate of 5.6%. The first time buyers grant $10k will cover the fees. So we are now awaiting approval. hope this helps. janine Link to comment Share on other sites More sharing options...
RachelGreep Posted September 29, 2014 Author Share Posted September 29, 2014 Thank you so much for your reply. So it is definitely worth going directly to them and talking about getting finance through the developers? Good to know. I am so lost in everything and the more I try to find out, the more confused I am getting. Good luck with it all. Sounds like you have it sussed! I am actually feeling a little less defeated now. Maybe there is a way to own our own place. Just need to find a credit card deal like yours! Fantastic. Well done. Great to hear some positive news. Link to comment Share on other sites More sharing options...
Petkula73 Posted September 30, 2014 Share Posted September 30, 2014 Depends what you are after really. You can afford a four bed house here if you're prepared to live in the outer suburbs. As per the previous poster, there are deals to be had in the Northern Suburbs and also out west. In general I find a lot Australians are a bit blinkered when it comes to commuting distances and times. A lot of colleagues at work thinks Melbourne stops at Moorabbin, but yet that's only 25 min to the centre. Places the Australians think are out in the sticks would be considered prime commuter areas in the UK. I agree with you though that it's a bit depressing. We rent in Brighton, but to buy a very modest family home here you need north of a million. Closer to two million for a nice place. Our house in the UK was a large 4 bed with huge gardens in a very nice village - and I used to think our mortgage was outrageous at 1200 pounds a month! We didn't know how good we had it, eh?! The UK is a hole though - never going back. Link to comment Share on other sites More sharing options...
Parley Posted September 30, 2014 Share Posted September 30, 2014 Brighton is probably the 2nd most expensive suburb in Melbourne only behind Toorak, so obviously homes there are very expensive. The locations is the most desirable in Melbourne so you need big money to pay for it. I'm interested in knowing where the $400K house and land package are. Link to comment Share on other sites More sharing options...
dmjg Posted October 7, 2014 Share Posted October 7, 2014 You don't have to pay 20% deposit. When you put in an offer, cross out the 20% and write 10%. Initial the change. It's upto the seller to agree or disagree with this. First time buyer bonus is available. Will this cover all your stamp duty and home loan set up fees? It didn't for us in 2010. Stamp duty costs can be added to the mortgage, but you are then paying it off over 25 odd years and paying interest on this......but you can't go over the 95% LTV, well, we couldn't! Link to comment Share on other sites More sharing options...
Gbye grey sky Posted October 7, 2014 Share Posted October 7, 2014 For now we are better off renting as we could never afford to buy the house we are currently renting and then there are rates on top of the mortgage. Sorry to have to say this but you would probably never be able to afford to buy a house equivalent to the one that you are renting. The 'return' on buying is long term. Interest rate fluctuations aside, the amount you pay in mortgage payments is flat whereas rents will always rise, and therefore as a proportion of your income a mortgage falls in the long term, renting doesn't, until at some future date you have paid it off and then live 'rent-free' (the position we are in now having made the final mortgage payment last June). But, and it is a big BUT, you have to make a major compromise on location or size of property to get that initial 'foot on the ladder'. Link to comment Share on other sites More sharing options...
mamba Posted October 7, 2014 Share Posted October 7, 2014 Brighton is probably the 2nd most expensive suburb in Melbourne only behind Toorak, so obviously homes there are very expensive. The locations is the most desirable in Melbourne so you need big money to pay for it. I'm interested in knowing where the $400K house and land package are. Anywhere north of Mill Park on Plenty Rd. Mamba Link to comment Share on other sites More sharing options...
Lambethlad Posted October 7, 2014 Share Posted October 7, 2014 $400K house and land package. http://www.realestate.com.au/property-house-vic-clyde+north-118084747 Link to comment Share on other sites More sharing options...
Marisawright Posted October 8, 2014 Share Posted October 8, 2014 We were talking to our bank about the ins and outs of getting a mortgage and buying our own place. How do people afford to buy a house. This is a very, very common dilemma in the capital cities of Australia. A very popular solution is to go on renting, and buy an investment property somewhere you can afford. You can get big tax breaks - I have one, and when I was working I got every cent of my income tax refunded every year thanks to my investment property. That certainly eases the pain of renting! The important thing is to do your research, learn how to do it properly, don't get sucked in by companies that offer to find investment properties for you (they're nearly all scams), get a valuer to prepare a depreciation schedule as soon as you buy it, and make sure your tax agent knows how to claim everything. Buy a small place in a good area rather than a big place in a crummy area - that way you're less likely to have trouble with tenants (but get landlord's insurance that covers you for malicious damage and non-payment of rent so it won't matter if you do). Link to comment Share on other sites More sharing options...
rosiew Posted October 8, 2014 Share Posted October 8, 2014 Before you rush into the house and land package have a look at what a second hand house in the same area costs. For two reasons - check the capital growth. These houses tend not to go up so fast as there are always new shiny ones coming on the market around the corner. The other reason is that the ticket price can include pretty basic floor coverings, window frames, tiles etc and no curtains, blinds, big sliding doors across the back, decks etc. So you should probably add 20%- 30% to allow for all that. If you go to some display villages make sure you asked what the houses costs "as displayed" so that you can see how those extra things that make it look so great really add up. It all depends how long you want to hold it I guess. Moving in Victoria is expensive because stamp duty and estate agents' fees are very high. If you know that you will stay on the outskirts until it is well established and going up in value then enjoy a shiny new house. Link to comment Share on other sites More sharing options...
rosiew Posted October 8, 2014 Share Posted October 8, 2014 Or move to Sunbury. Metro train to town or 30 minutes freeway drive. Established town with a good choice of schools, infrastructure all there, countryside on the doorstep and plenty of modern 4 bed houses at and under $400,000 with back gardens. Link to comment Share on other sites More sharing options...
flag of convenience Posted October 8, 2014 Share Posted October 8, 2014 We were talking to our bank about the ins and outs of getting a mortgage and buying our own place. Obviously they were very pro us taking out a 95% mortgage even though it means mortgage insurance and the fact that interest rates are likely to rise again sometime in the not so distant future. They obviously want their commission. Anyway, we had not realised just how much is required up front when it comes to fees etc. We though saving a substantial deposit was the hard part but now it seems that even if we save up a 20% deposit (unlikely at present) then we will likely need the same again to pay for legal fees and all the other cr@p that we had not thought about. For this kind of money we could have had a big detatched 4 bedroom house in a nice area where we used to live in the UK (I know, I know, I just mean we couldn't afford that kind of lifestyle before we left so we are a bit fecked now). How do people afford to buy a house? Are we just going to have to rent forever? I really can't see us being able to save up for a house where we want to live. Anybody able to tell me I am completely wrong and that I have totally got it wrong and that I was not paying attention? Also, does anyone know of the deals where you pay a typical rental price for a property that is newly built and then after so long you own it? I am wondering if the catch with this is high interest rates plus a very long term. Maybe you are still paying 80 years later. They are advertised like this on realestate.com.au http://www.realestate.com.au/property-house-vic-clyde+north-414125907 Thanks for any advice on this. For now we are better off renting as we could never afford to buy the house we are currently renting and then there are rates on top of the mortgage. More a question what you can afford and by this I mean longer term when rates begin to hike upwards. Most anyone can get into the housing market if working even if through a broker, who can dress up some fancy looking loans and sell to unaware punters who can find themselves strapped further down the road with mortgage payments and low life quality. Renting though a pain these days in OZ with obtrusive property managers does have positive sides. Can't speak about VIC but here in WA the market has turned around in being more favourable towards renters. I'd suggest offer less than asking if a renter. With buying I'd suggest purchase in a good location something under your capacity to afford but get the area right. Don't forget the considerable costs around buying property also. Yet another huge source of state government income. Link to comment Share on other sites More sharing options...
rammygirl Posted October 8, 2014 Share Posted October 8, 2014 The stamp duty is the killer, high here in SA. We worked out to buy where we are the stamp duty alone would cover more than 12 months rent! ( and we pay a high rent) Made us stop and think, we are now considering cheaper doer uppers and land ( although that is hard to come by where we want to be) or new build where stamp duty only paid on the land portion. other fees are similar to Uk but the stamp duty here is much higher. Link to comment Share on other sites More sharing options...
Petkula73 Posted October 29, 2014 Share Posted October 29, 2014 The stamp duty is the killer. Tell me about it! We had a chat with the ANZ about our mortgage options. No problem getting the money for the mortgage, BUT we need 10%-20% in cash as deposit on the day when buying at auction, the remainder of the 20% (if we pay 10%) at completion and then we have the pleasaure of 5.5% stamp duty, solicitors fees, removal costs and so on. So, a $900,000 house needs something like $250,000 available in cash before we would even get the keys. Then we'd have the pleasure of paying a $4000 a month mortgage until we slip off this mortal coil. And what are we looking at for that sort of money? Either a smallish 2 bed flat, or a run down, falling to bits 2/3 bed house. And in an even nicer twist of fate, all those run down houses with plots bigger than a tennis court are being bought by investors who rip them down and build two shoe boxes on. So, when we do turn up at auction we're bidding against people with much deeper pockets than us so get out bid. That's something else that stinks here - auctions. Advertise house with a guide price of $800K, when they know full well they won't sell it for under a million. There's a house near where we are at the moment with a "guaranteed reserve" of $830K. The ANZ pulled off a property report on it for us and hey presto, the min value was $1.1M, mid point was $1.25 and upper was $1.4. The bank manager laughed and told us there's no chance in hell the estate agent will let this go for under $1.2M. If the auction doesn't quickly move up over the $830K reserve they just close the auction. In other words, no one is going to buy the place for $831K. I call that dishonest, but hey, they're estate agents so what do you expect. I do honestly wonder how anyone can survive here. I am pretty well paid and we constantly struggle to make even the most basic of ends meet. In the UK we had a very comfortable lifestyle. Still not tempted to go back though - UK is the pits. Link to comment Share on other sites More sharing options...
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