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How to save for a home loan deposit - Mortgage Choice
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First home buyers - Mortgage Choice
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Q: First home buyers, my income is 92,000 and my wife 85,000 and we have been living the same property for 3 years and never missed paying the rent. We have saved 35,000…. have no debts and pay off our credit card each month. Can we get a loan and roughly how much could we borrow?
A: Peter,
To do a full analysis I would need to know;
do you have credit cards & if you do what are their limits?
do you have any personal loans?
do you have HELP/HECS debt?
Do you have children?
Does your income include overtime or bonus' or commissions?
How long have you been in your current employment?
Are you on probation?
On face value your incomes are strong so that is not the issue. But as a general rule you would need 10% savings, so with $35,000 saved you could buy a property for circa $350,000. But that is where a broker can advise other strategies to overcome the limited savings.
The other factor under our current regulatory environment is that we are obliged to meet with prospective clients to properly identify each borrower.
As I say, happy to speak to you...
Pete Dall
0414 583 233
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Q: First home buyers, my income is 92,000 and my wife 85,000 and we have been living the same property for 3 years and never missed paying the rent. We have saved 35,000…. have no debts and pay off our credit card each month. Can we get a loan and roughly how much could we borrow?
A: Peter,
Under industry regulation I am not able to provide the answer you seek without first understanding your full financial situation. The information you have supplied is but part of your overall financial situation.
You would need to make an appointment with me or another broker so that I can fully assess your situation.
As I live in the bayside suburbs I am close to you. If you would like to give me a call I would be happy to help you achieve your goal of home ownership.
Pete Dall
0414 583 233
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Mortgage Choice - better choices for a better life
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Do you think your home loan interest rate is too high?
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What is an offset account and what is a redraw facility - Mortgage Choice
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Q: Hi
Our home loan is with CBA $540,000 and the property would be valued around 800,000… we both work, 2 kids 8 and 10 and we don’t like credit cards. The rate is 4.19%, what is the best rate we could get by refinancing?
Thank you
A: Phoebe,
CUA, you may have seen their ads on television. They are based in Queensland but that should make no difference to you as they use the Redi network of ATM's (NAB) so funds are accessible via debit card.
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Q: Hi
Our home loan is with CBA $540,000 and the property would be valued around 800,000… we both work, 2 kids 8 and 10 and we don’t like credit cards. The rate is 4.19%, what is the best rate we could get by refinancing?
Thank you
A: Hi Phoebe,
On the assumption that your incomes will support lending of $540,000 you could be eligible for a rate around 3.65%.
Lenders have really tightened up on borrowing capacity so that is why I mention the issue of your incomes.
How long have you had the existing home loan?
Peter Dall
0414 583 233
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Q: We have too many loans and want to see if we consolidate a $485,000 home loan, personal loan $7,000 and 3 credit cards $17,000. The rate on our loan is 4.29% with Westpac and the house would be worth around $750,000.
Can we get a lower rate and what would the repayments be? thanks
A: Hi Megan,
Based on the value of your property & your total debt, indicative interest rate would be approx 3.65% but will depend on your specific circumstances.
On face value there should be no issue with rolling the personal loan & the credit cards into your home loan provided there are no late payments. So, to be able to determine if you are able to obtain these low rates I would need to know more about your financial situation.
I am local to Patterson Lakes, so would be happy to discuss your options.
Peter Dall
0414 583 233
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How to secure your dream home for the best possible price - Mortgage Choice
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Q: We owe $25,000 on credit cards and finding is hard to make the repayments, we are a month behind and we want to see if we can refinance the cards into our home loan. The home loan is ok as we have made it the priority. The loan is $360,000 and the property is about $520-530,00 – is this possible?
A: Hi Frank,
Yes, it is possible.
If I took this deal to a lender & asked them to roll the credit card into your home loan with late payments they would simply say no. But there are other ways of doing this. If you need assistance you can call me to discuss.
Peter Dall
0414 583 233
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What happens when you see a Mortgage Choice Broker
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Q: My partner and I have been discussing buying a new home. We currently live in my home which is worth about $750,000 and the home loan is $310,000. If I didn’t sell my place can we use the equity as a deposit in a new home and does that mean my loan would become an investment loan if we rented it out? The home we are looking is around $1.1M, would there be enough equity in my place to pay a deposit?
A: Hi Mason,
If your loan is $310,000 & your home is worth $750,000 you have $290,000 (80% of $750,000-$310,000) in available equity before mortgage insurance, so lots of equity to help you secure your new home. And yes, the existing loan would become an investment loan at investment rates around 4% depending on your circumstances.
Purchasing for $1,100,000 will incur stamp duty costs of approx $63,000 so total cost to buy would be $1,163,000 less $290,000 equity = loan of $873,000. So now the tricky bit, does your income support total lending of $1,473,000 ($310,000 + $290,000 + $873,000)?
I can help you understand your borrowing capacity & find a best/suitable lender for the deal.
Peter Dall
0414 583 233
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Q: I purchasing my mothers second property for the mortgage price only, which is roughly a third of the value. The property is in excess of 750000. This will be my first home. What duty and fees will i pay?
A: Hi Peter,
Unfortunately if the value of the property is in excess of $750,000 you will not be eligible for first home buyer concessions as the concessions cut out @ $750,000 & the State Revenue office will work off the property value, not what you buy it for.
Stamp duty & fees will be approx $42,000.
Happy to discuss mortgage options should you need to organise finance.
Pete Dall
Mortgage Broker
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Q: Hi, my wife has just had a baby and will be off work for 12 months and we would like to get some advice on lowering our home loan payments. The loan is $420,000 and we currently pay $520 a week… the rate is 4.07%. I work full time as a contractor and earn between $1700 and $2,000 a week. Could we refinance or are there other options?
A: Paul,
It is possible for you to re-finance but I would need some more information in relation to your financial situation. Also will depend on your status as a contractor. Please feel free to call me should you wish to discuss further.
Peter Dall
0414 583 233
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Q: We would like to extend the interest-only period on our home loan but our lender is now saying due to recent changes to the way they calculate how much we can borrow they won’t approve the extension.
The loan is $650,000 and the property would be valued at $800,000. Do all lenders use the same calculation process and will that stop us from refinancing?
A: Hi Katherine,
As Scott has mentioned, lenders assess your ability to service the loan & the loan features differently. Scott has also alluded to the fact that all lenders are now obliged to undertake due diligence & clearly explain the issues that arise with an interest only loan.
Happy to discuss further. You can contact me on 0414 583 233 or at peter.dall@mortgagechoice.com.au
warm regards
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Q: I have 3 investment properties, about $1.2m in value and loan of $700k. The rate on the loan is 4.35% and was up as principal and interest. Is the rate too high and should we look to change the loan to interest only?
A: Hi Melissa,
Based on the value of the properties & the debt, it may be possible to get an interest rate of 3.94% to 4.19% depending on your circumstances. The interest rates quoted above are for principal & interest (P&I) repayments.
Due to regulatory pressures, lenders now charge a premium for interest only (IO) loans. So, the IO rate for your loans would start at 4.34%, similar to what you are paying now.
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Q: I’ve been a contractor for a number of years with regular clients and stable income. My question is why is it so difficult to get a home loan as a contractor?
A: Mick, it shouldn't be that difficult. Lenders want to be able to evidence your earnings capacity to ensure you have the ability to repay their loan. The structure of your contractual work will depend on the requirements you need to show the lender that you have the ability to repay the loan. Usually you show 2 years tax returns & providing the income is consistent & adequate then it should not be too difficult. Plus there are other ways of structuring the loan.
Happy to discuss options with you.
Peter Dall
Mortgage Choice home loan broker
0414 583 233
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Q: I am thinking of leaving a full time role to set up my own business but concerned about the initial cashflow. Everyone is telling me to go for it so I’d like to ask about finance and can I extend my home loan before starting the business. The unit is probably worth 500k and the home loan is $210k. Is this a good way to get started as I already have a number of clients in the waiting?
A: Jacqui,
As Suresh has already pointed out, banks are reluctant to fund business start ups & I have a number of clients that use equity in their own home to start a business. It is a relatvely simple process of applying for funds for investment purposes.
happy for you to call me for further guidance.
Peter
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Q: Hi - question about a home loan – how do you know if a mortgage broker if offering us the best loan… why just mention ANZ and Westpac, how long should we have to wait for approval?
A: tony,
If I were doing your loan application I would provide you with a few options so that you can clearly see which product better suits your needs. Some brokers receive higher commissions based on volumes they put to certain lenders but here at Mortgage Choice, me as your broker, I receive the same commission no matter which lender you choose.
As for approval times depends on what you are doing. Is it a purchase? If so, then once the property is valued the approval should take no longer that 5 business days.
Happy for you to call me
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Q: We’re first home buyers and would like to ask if the benefits announced in the budget apply to buying an investment property as our first property or do we have to live in it?
A: Sally,
Yes that is true but concessions such as what the State Government is offering helps. There are other ways of getting into the property market such as parental guarantees, gifts of money that are all considered by lenders as genuine savings.
happy to open dialogue with you to discuss your particular situation. Call or email as below;
Peter
0414 583 233
peter.dall@mortgagechoice.com.au
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Q: Our home loan is with one of the major banks and we have been discussing refinancing to get a better rate. In our search, it seems the best rates are with credit unions and lenders we have never heard of. We would like to know what the risks are to move away from the bank?
A: Kerrie,
as Ross has mentioned some of the smaller 2nd & 3rd tier lenders are able to offer better rates often because they don't have the overheads of the majors.
Lenders like ING & CUA are probably better known but there are also credit unions that are more customer focused. There are some great options available. In terms of risk, these lenders have to meet the same regulatory requirements as the big 4 so from my perspective the risk is minimal.
Cheers
Pete
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Q: We’re first home buyers and would like to ask if the benefits announced in the budget apply to buying an investment property as our first property or do we have to live in it?
A: Sally,
The benefits are only available to first home buyers & you have to live in the property for 12 months to retain the benefits.
After that, you can rent the property out. Nothing has changed in that regards with the new concessions announced by the State Government.
Call me if you wish to discuss further
Peter Dall
0414583233
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Q: Is it possible to use the funds from a personal loan as the deposit to get a home loan?
A: Seb,
It is possible, but there are a number of issues that you would have to resolve particularly if the lending is above 80% loan to value ratio.
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Q: I am using a how much can I borrow calculator and want to know if I can include commissions and superannuation as income?
A: Seb, some lenders will accept commission income but not all. The commission income generally needs to be regular & part of your employment contract. No lender will accept super contributions as income for servicing home loan.
Pete Dall
0414 583 233
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Q: I have been researching the first home buyers grant and wanted to know if anyone knew of other options if I didn’t want to purchase a new property?
A: Seb, as a first home buyer you are entitled to a 50% reduction of the stamp duty payable if you purchase an established property up to a maximum purchase price of $600,000.
As you are no doubt aware to get the $10,000 first home buyers grant the property must be new. To satisfy that criteria no-one must have lived in that property before, which of course means very new, but not necessarily construction. For instance the property may have been built already but for whatever reason no-one has yet lived in it.
Pete Dall
0414 583 233
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Q: I am a Director of a growing small business and have a mutual agreement with my partner to buy him out at the end of this calendar year. It's a reasonably significant amount, so will need to borrow the money. What's the best way to go about this? Can I borrow the money through the business or do I do it personally? Both my personal and business financials are quite sound.
A: Jarrod,
It is difficult to say which way would be the best but if the loan funds are held by you as an individual you will need sufficient security (equity) in a property to obtain the required funds.
Alternatively, you can do it through the business as a commercial loan.
Peter Dall
0414 583 233
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Q: I’m interested to get some advice on the questions I should be asking real estate agents before making a decision on who to choose to help sell our home?
A: Things I think you should be asking include the following;
Can you show me a recent property sales report to show what the house is worth?
How long has the property been on the market?
Are there any known issues with the property, land or neighbours’ properties?
How long have you been a Real Estate Agent for?
What makes you different to other real estate agents?
The estate agent is working for the vendor (the seller) so is only going to disclose information in the best interests of the vendor.
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Q: I have two children about to start Private secondary school. We have been putting away money since they were born into a separate bank account and have around $80k. is there a better way that we can use this money - I have heard of education funds, but we have not explored. one idea was to buy an investment property with this money (and some top up) and effectively use some of the rental money to pay their school fees and then incur a debt for the fees against the growth in the property?
A: Hi Rohan,
the idea of buying an investment property is sound as the income can be used towards school fees & any interest payable is tax deductible to you.
Peter Dall
Mortgage Choice
0414 583 233
peter.dall@mortgagechoice.com.au
