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Q: I would like to get some advice on buying my first home … savings around $50,000 with a full time job as a teacher. I have been looking at properties around $375 – 400,000 and want to know if could buy a property on my own with the money saved or will I need a guarantor?
A: Hi Jake,
To buy at $400,000 with a $360,000 loan, you would need to have a very strict budget with no other liabilities (eg car loan, personal loan, credit card, dependents etc) if you are on a teacher's starting wage in South Australia. So the answer depends on your exact circumstances. To summarise though, to buy at $400,000 in South Australia you would need to budget for around $30,000 in costs on top of your $40,000 deposit (total $70,000). This may come from the First Home Owners Grant plus savings if buying new. This is just an example of how 'tight' your purchase would be - in terms of income/expenses from the bank's point of view - as well as the deposit funds required to cover all costs of stamp duty, solicitor, Lenders Mortgage Insurance etc.
There are lenders that deal specifically with teachers, who will also give allowance through longer loan terms if you are wanting to maximise your borrowing power. They also take into consideration casual/contract employment a lot more 'gently' for teachers. It's important when considering a lender to also consider your borrowing 'personality', as you'll be dealing with the bank/lender for a very long time! Ethical lending (eg does your bank invest in fossil fuels?) and whether profits go to shareholders or members (such as a mutual bank operates) are often considerations that aren't discussed or thought about when first taking out a loan but can certainly add value to your lending decisions beyond the 'bottom dollar' (although that will always be your 1st priority!)
Please feel free to call me on 0400 794687 or email me at deb@teachershls.com if you would like more specific information relevant to your personal circumstances. Although based in Queensland, I deal with teachers nationwide.
Kind regards,
Deb Richards
BBus GDipEd DipFMBM
Teachers Home Loans
www.teachershls.com.au
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Q: I am a Tennant in Common with my partner. We contributed evenly for the deposit. Due to our incomes,we agreed he would be responsible for 55% and I would be responsible for 45% of the repayments. Does this mean he owns 55% of the property and I own 45% ?
A: Hi Raylene,
Unfortunately I am not a lawyer so I am unable to give you legal advice regarding selling a tenants in common share. I would advise you to check with a solicitor that is skilled in this area. Normally in such circumstances a professional valuation is done on the property to determine the value of each share (conducted by a professional valuation firm - not simply a real estate appraisal).
From a lending perspective, any mortgage on the property will need to be refinanced to include any new owner (even if written under a 'property share' arrangement). Any new part owner will be legally tied to the lending of the other owner, with each having to be a 'security guarantor' for the other, so due to this fact both the new and remaining owner have to agree that their financial liabilities will be legally tied together in this way - so this often determines who you can sell your share to. However if there is no mortgage on the property, I believe that you do actually have the legal right to sell your share to whoever you want to - although please do seek legal advice regarding this statement as advised above.
If the other owner is just 'taking over' the loan (and therefore 'purchasing' the other share), the bank will still need to see evidence of the ability of the remaining owner to repay the loan, which would mean a full financial review of the remaining owner (eg income and details of any other loans/credit cards, dependents etc) - which is essentially the same process as 'refinancing'.
Hopefully this answer has provided further clarity; I'm glad to have been of some help. Sometimes expert advice can make complicated decision making just that much easier - the main reason why over 50% of Australians now use a mortgage broker to help them with their lending situation.
Have a great end to the Easter break!
Kind regards,
Deb
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Q: I am a Tennant in Common with my partner. We contributed evenly for the deposit. Due to our incomes,we agreed he would be responsible for 55% and I would be responsible for 45% of the repayments. Does this mean he owns 55% of the property and I own 45% ?
A: The Titles Registry Office
Department of Natural Resources and Mines
William McCormack Place
Level 4 Building 2
5b Sheridan St
Cairns
8.30 - 4.30 M-F
Phone 1300 255 750
Hope this helps!
Cheers,
Deb
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Q: I am a Tennant in Common with my partner. We contributed evenly for the deposit. Due to our incomes,we agreed he would be responsible for 55% and I would be responsible for 45% of the repayments. Does this mean he owns 55% of the property and I own 45% ?
A: Hi Raylene,
If your property title lists your ownership as Tenants in Common as 55/45, then that would be correct. However unless you have set your home loan up as a 'property share' arrangement in the same proportions (which only a couple of lenders do), then the repayments are negotiable between you.
It seems however that if you contributed evenly for the deposit that perhaps you didn't specify a 55/45 Tenants in Common share of the title but 50/50. In this case, no matter how much each person pays on the loan, then the property is owned equally by both of you.
I'm happy to discuss any further questions over the phone (my mobile is 0400794687), and also recommend that you query the solicitor who looked after you for the property purchase about the original set up of the property title as Tenants in Common. If it doesn't reflect your intentions, then it is possible to have them change it.
Kind regards,
Deb Richards
BBus, GDipEd, DipFMBM
www.inlinehomeloans.com
101 Mulgrave Rd, Parramatta Park, 4870
