I have 20k cash, still cant buy anything?

Hello everybody
Myself and my partner have $20k saved up. We want to buy our first home in the outer suburbs of Sydney and have done some sussing out and believe we can purchase for under $270k, perhaps even $255k if we get lucky.

Im getting the impression that 20k is not enough for a 10% deposit, plus the first home owners grant which would bring it to $27k.

If we bought a house for $255k, would $27k not be enough for the 10% deposit + additional costs of buying a house? I know that fees will eat up the majority of the first home owners grant :(

Ideally I want to buy ASAP as my current living arrangements are not ideal.
I do not want to buy with the bare minimum in our savings account obviously, but we need the 10% as this will be a low doc loan due to self employment.

I would like some experienced opinions from people here - a $255k house, $20k in the bank - how far off am I from being able to buy?

Thank you all in advance.
 
Myself and my partner have $20k saved up. We want to buy our first home in the outer suburbs of Sydney and have done some sussing out and believe we can purchase for under $270k, perhaps even $255k if we get lucky.

Im getting the impression that 20k is not enough for a 10% deposit, plus the first home owners grant which would bring it to $27k.

If we bought a house for $255k, would $27k not be enough for the 10% deposit + additional costs of buying a house? I know that fees will eat up the majority of the first home owners grant :(

Ideally I want to buy ASAP as my current living arrangements are not ideal.
I do not want to buy with the bare minimum in our savings account obviously, but we need the 10% as this will be a low doc loan due to self employment.

I would like some experienced opinions from people here - a $255k house, $20k in the bank - how far off am I from being able to buy?

Solution: buy cheaper. Do you need a house right now? How about a unit for about $200k? If you need a house, go further west. There are 200k houses in Sydney.
Alex
 
As Alex said.

That in mind. Low docs over 90% (much less over 80% without a lot of pain) are getting rarer and rarer.

Options / comments...

Pretty much the only one on the market is Rams in that regard. Track down "Kristine" on the forum and she'll be able to qualify the rams side very easily

Or if you can find a person (mom or dad etc) who is willing to go as a guarantor for you and you might be able to do a family equity product - cba, st.g, wbc...

Realising that its a bit of a confusing situation... think about scrolling thru some of the finance posts and track down a broker in nsw. Or get on the MFAA website and you can do a search for a local broker who can navigate the maze and options for you.
 
Yes we want a house Alex. 200k may buy you something in Tregear or similar Mt Druitt suburbs but Im not living there. We are looking at south west such as Campbelltown. I did some thorough house hunting including inspections a few months ago and there was nothing under 260k that would be in liveable condition.

I have contacted a broker here in sydney and she is going to look into it for us. I have a feeling we may need to save another 5k though?
 
Yes we want a house Alex. 200k may buy you something in Tregear or similar Mt Druitt suburbs but Im not living there. We are looking at south west such as Campbelltown. I did some thorough house hunting including inspections a few months ago and there was nothing under 260k that would be in liveable condition.

I have contacted a broker here in sydney and she is going to look into it for us. I have a feeling we may need to save another 5k though?

OneDay, what you can buy is limited to what you can borrow and have saved up. If you want a house NOW, you probably can't afford to buy a property for $260k. That's just the reality. I understand that you want a house, but that might not be within your means at this point. Also, note I didn't ask whether you 'want' a house. I asked whether you 'need' a house. The two might be very different.

More information would help. Such as your income and what % of your net you are saving. Remember the more you borrow, the more the repayments are. Even if the bank is willing to lend you what you want (a dangerous proposition) you still have to look at your own spending to determine whether you can afford it.
Alex
 
....what's your (and more importantly your partner's definition) of "liveable" ??

Thats a thread on its own isnt it?

Where I'm headed... people have certain standards / basics they look for when they buy...

Me, its min 4 beds (if its a house - units 2), Study, DLUG, High side, not on corner, views to either the ranges or the city, modern etc.

I figure Oneday has certain standards that they want too.
 
Yes, but it doesnt mean they cant either...

I'm not trying to tell them to go out and max themselves out on a new house then go buy a $5000 plasma on a 2 year deal, then a new car at 20% interest and forget they still have a mortgage and house to pay for then whinge when the bank comes to take the house because they didnt make the payment and thought watching WWE on foxtel was more important.

To save up $20k is a good sign for a FHB with (from the sounds of it) little to no assets outside of it... in the sense that most of the people I see would be lucky to have that in the bank if it wasnt being put into a property or super or something (where they are then into a growth asset)

I do understand (or think i do) your thinking in cautious lending and purchasing w/FHBs but at the same time dont think FHBs need to be discouraged from buying property, and I dont see where we should be telling them to go cheaper. I figure people know what they can and cant afford

But from what I see they've saved up their 5% + costs, working.... they've done their pennance.

If the 20k deposit is from a scratchie then different story.

But again, we dont have all the facts to really make a full decision
 
Isn’t the answer to Oneday's question just a matter of answering "what ae the purchasing costs on a $270k proeprty ?
E.g.

TOTAL COSTS: $270k purchase price + $10k purchasing costs = $280k
10% DEPOSIT: $280k x 10% = $28k

Note: I made up the "$10k purchasing costs" - perhaps someone can add more accurate detail.

Then, Oneday can look at his loan affordability etc…and determine what he can get compared to what he wants etc etc
 
Never bought in NSW, but had a read of the NSW OSR website and looked at a few duty calculators, and apparently you don't pay mortgage or stamp/transfer duty up to 500k.
http://au.pfinance.yahoo.com/calculators/stamp-duty.html

So I reckon OneDay is only up for

- Duties $0
- Solicitor $500
- Inspections $500
- Lender's Mort. Insurance (if he borrows more than 80%) <=$2000 built into loan.

so as little as $2200 odd, with some incidental fees.


Now, oneday....how bout some feedback on what sort of house you are looking for....

This is what realestate.com.au spit out today in campbelltown for :
house <300k
land > 420m2

there's at least 4or5 houses under 270k that look fine for a first home.....
and don't be afraid to go and offer 270 for a 300k house.

If one of those is beneath you, I suggest Yar Dreamin.....

My fix for that is to $hit in one hand and wish in the other and see which fills up first....


P.S.
some more purchase calculators
St George
Suncorp
rea.com.au
YourMortgage
 
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Thats right, no stamp duty on first house in NSW.

Yes there are some nice homes under 300k and we do plan to put in some low offers when the time comes.

The point of the thread was as jaycee pointed out to ask whether having 20k in the bank would get me a home in my price range, not whether i can afford it or not. I've done the calcuations, we can very well afford it.
Alex - we dont just want a house, but yes do "need" a house for various reasons, namely the back yard space.

Liveable = no major renovations needed particularly to bathroom or kitchen. I saw some absolute shocking houses when i was looking and they were asking 280k or more.

We prefer brick and my other half in particular is fussy about that. I have lived in weatherboard my whole life without a problem, i guess they are just more prone to termites?
It certainly seems we could easily buy under 270k if OH did not want brick.
 
The point of the thread was as jaycee pointed out to ask whether having 20k in the bank would get me a home in my price range, not whether i can afford it or not. I've done the calcuations, we can very well afford it.
Alex - we dont just want a house, but yes do "need" a house for various reasons, namely the back yard space.

We prefer brick and my other half in particular is fussy about that. I have lived in weatherboard my whole life without a problem, i guess they are just more prone to termites?

OK, then it seems to be just a matter of serviceability and finding the loan. Have a look at how much your income is, and how much money you can afford to pay into the mortgage given your current living expenses.

Do have a think about how it'll affect your future borrowing capacity and cashflow, though. I realise you want a house now, and bear in mind that I don't know your circumstances at all, but sometimes maxing out to buy your own place is not the smartest thing to do. e.g. if you leave some borrowing capacity you might be able to buy IPs or other investments in the future instead of putting all your money towards your PPOR.
Alex
 
Hi Oneday,
An alternative to consider (with all due disclaimers from me) is looking at some of the non bank lenders. The rates & fees will almost certainly be higher than the banks, but they have more flexible definitions of "full doc" loans than the banks do. You may find that one of these lenders will consider your income evidence sufficient to be full doc and may lend you 95% + LVR.

Combine this with the FHOG and the FH Plus in NSW (assuming again that you're eligible for both) your $20k may enable you to purchase a home of $300K or more and let you find a place you're happy with more easily.
 
Hey WW,
Unfortunately, this is not an area I use the non bank lenders for very frequently, so offhand I can't comment on many of the lenders from your link.
I was recalling a training session with Liberty Financial, specifically when I made this suggestion.
But I do know from discussions of other scenearios with some of these lenders, that their definitions of "proof of income" are sometimes surprisingly broad.
 
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