buying costs

Hi
If I was to buy my first investment property somewhere out in Armidale, Broken Hill, Muswellbrook or Wagga Wagga (any country town) etc. for prices anywhere between $60,000 - $160,000

What basic amount of money do I need to save before I can go ahead to buy.

A few of my friends have bought their PPOR and received the FHOG and mentioned that the $7,000 covered most of the costs. Is this about right? So, would I need the 3% - 10% deposit + $7K or are there more costs involved for IPs eg. taxes, insurances etc?

What are the costs? eg. if a property is $100,000, I will need $5,000 (5%) Deposit + ???

Thanks for any help

Loz
 
Loz,

I aim for a 1% deposit (REA don't like it but it is my money!!!) and I allow 5% for buying costs. Hence, for a $100K house, I would need $6,000. Where possible, I try and borrow the expenses - so in the end one would only need the deposit, say $1,000.

But I have equity in other properties. If you don't have any equity, I would guess you would need 20% deposit (unless you want to incur LMI) and allow 5% to 6% for expenses. Hence, for a $100K property, you would need around $25K.
 
Hi Loz

Much depends on where you want to buy

Wagga would be ok with 5 % deposit and around 5 to 6 % purchase costs if you went with a lender that adds the mortgage insurance to the loan.

Mortgage Insurers have some though rules where they want to see "genuine" savings.

This is 3 to 5 % of the purchase price saved regularly over a min of 6 mths

Ta
rolf
 
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