First Home Buyer..need Guidence??

[morn.pen]

Im sick of hearing all the stories of my friends with lower incomes than myself, breaking into the market before me and doing it with ease. So i asked myself the obvious question..why cant i do it?
I have a couple of questions as to how hard it is to borrow money and regarding the grants and such.
Q1. Can i borrow money having no record of savings?
Q2. How long would i have to reside in the house to be eligable for the first home buyers grant?
Q3. Long term plans are to use this as an IP and to start my portfolio, Would IO be they way to go?

A bit of info..
I am a 25yo self employed Carpenter who has been sub-contracting to a builder for the last 4 years. On average i would earn close to $80k pa before tax. My only Debt is a dreadfull Nice fast atractive ute, which i owe a further 16k on. I pay 200pw. for this.
I live 'rent free'(the ato doesnt know this) in my parents IP which i am renovating for them. My only other expensis are bills,food,fuel,etc. I live a very care free life and love having fun spending money on my hobbies and lifestyle, but im very prepared to have this all change in moderation!

MY PLAN..(probably not a good one..need advice on)

I plan to borrow enough money from a lender to buy my first home. Live in this property for 6 months getting it neat and tidy to be rent ready. I plan to use part of my FHB grant to pay out my remainding car loan. $200.00 extra in my pocket a week. If i can pull between $300.00 - $400.00 pw in rent for my Property this leaves me with a small sum to come forward with to make up my monthly repayments.That will come from the $200.00 i save from my car payments. I think this will still be tax deductable therefor hopefully getting some money back come the end of financial year. This tax return i plan on then putting towards my buisness tax, wiping my buisness from paying tax..leaving me with more money saved..
I hope this makes some sense and someone out there can point me in the right direction..because im sick of paying a car off when i could be making money in property!!!!

 

[Qlds007]

Hi Morn.Pen

Couple of simplistic answers for you:

Q1. Can i borrow money having no record of savings?
Yes you can but realistically you wont get more than 90% loan so would need to be gifted or otherwise the other 10% plus costs. 95% is available however credit underwriting is a lot harder. Suggestion would be to have your parents lend you 10% of the purchase price plus costs by increasing their loan, from their cash funds or similar".

Q2. How long would i have to reside in the house to be eligable for the first home buyers grant? Normally 6 months in the first 12 months

Q3. Long term plans are to use this as an IP and to start my portfolio, Would IO be they way to go? Yes ideally interest only with 100% Offset account

 

[Bradsdad]

To add, the FHOG won't be able to go towards the Car as it will be paid on or after settlement. You would need to do this from deposit funds. Depending on your entry level this may or may not need to be paid off according to servicing calulators.

I guess the 1st question how much can you contribute towards the purchase (not including grant). If nothing and you don't have family to asist you will need to get saving.

Regards
Steve

 

[LoanFinder]

Why not consider a family guarantee.

This will allow you to fund the purchase price and avoid some or all of the mortgage insurance.

Talk to a mortgage broker, there are good ones close to you from this board.

It's free, so why not find out all the options available.

 

[Gools]

Morn.Pen, it's interesting from your post that it reads like you still wont have any interest in saving any money after the purchase of this property. I have trouble trying to work out that you place no importance on saving some of your $80k pre tax income a year. You're living rent free. What on earth do you spend your money on??

I hope you will soon find out how powerful savings can be. Good luck with your house hunting and I hope you have a think about the long term and work on getting your LVR down so you can keep making progress. As the saying goes 'make hay while the sun shines!'

Gools

 

[Mike F]

Morn.Pen, it's interesting from your post that it reads like you still wont have any interest in saving any money after the purchase of this property. I have trouble trying to work out that you place no importance on saving some of your $80k pre tax income a year. You're living rent free. What on earth do you spend your money on??

I hope you will soon find out how powerful savings can be.

Agree, start saving first. Now! Pay off the car loan, or sell it and buy a cheaper one. Then save up a deposit of at least 10%. If you are living rent free, you should be able to do this by the end of the year on your income.

IMHO stay away from asking parents for deposit loan or guarantee. That will not make you committed to going down a savings and investment path if have it handed to you. Why should your parents risk their money, just because you have spend yours and had fun. They are already giving you a place to live for free.

Time to start budgeting your money.