It’s not about paying more for a better house, it’s about getting a better location.
This. It happens even before you get the loan. Have had several friends relationships break down while saving deposits. If you stop doing the things that make you happy for financial reasons it can take its toll. All for the sake of a nicer house/more debt.
I’m constantly fluctuating between wanting to save the deposit and wanting a Kumo.
I’ve made a trade-off by buying Steve’s SE Stout for $300 so I can get back into MTB after not having one for about 3 years
It’s still paying more though, right? I think you’re preaching to the wrong crowd here, we seem to be a bunch of fiscal conservatives.
this is all sterling advice, as OP JP says, it’s awesome to pick the collective brain of a diverse and well educated rabble. my 2c worth:
- wish i’d got into the market a bit earlier - could have, but was scared
- in hindsight i’m glad we initially stretched ourselves a little bit, now on one (slightly more substantial) income a few years down the track and 2.5 kids we are still doing well. but absolutely take the ‘you can afford this much’ calculation info from banks with a grain of salt.
- the week between making an offer on our house ‘subject to finance’ and our finance being approved was without a doubt THE most stressful week of our lives - get that shit in order beforehand!
- ANZ loans people were horrible to deal with in our experience, would use a broker next time (after meeting with several and trying to ascertain if i was being sold the most suitable loan, or the loan with the best commission for the broker)
- modest house, better location is a mantra i would adhere to again and again
Reading this thread, I’m not sure that I haggled enough. My repayments are occassionally tight but ultimately manageable.
I went with my usual bank (CBA) – it’s dumb, but I like being able to see my entire financial position on one screen.
I also totally agree with points raised above:
if you’re really thinking about it, have your finance ready to go so you can act and, if at auction, bid aggressively but confidently. and don’t labour over it toooo much. it’s such a ridiculous commitment anyway, just get into the market.
TC - I’m really scared of buying a house.
JP. Move in to Kambah. Be rad with me.
Careful with brokers, we used a mate from works broker and he was a complete cowboy… Kinda used our lack of knowledge to his advantage.
Once I started working in the industry things all became a bit clearer.
A large deposit goes a long way, I lived with my fiances parents and saved for 2 years, worst days on my life worth it in the long run.
I also advise calling your bank every year and pulling a “what can you do to keep my business” kinda deal… This also works with phone companies as well.
It’s never too late to haggle, If you don’t think your getting the best rate threaten to change banks
Yeh, and to take all your day-to-day banking with you. Go to another bank and see what you get offered for moving all your accounts over, use it to get more out of your current lender. If you can show you’re serious they’ll come and play. Banks hate “churn”, they want to keep all of your business.
Interesting… thank you.
I think the whole ‘your own home as an investment’ thing is a bit dumb. Well, sure it’s an investment, but more likely an investment for your kids than yourself. Sure you can use the equity down the line to fund purchase of an investment property or something, but the difference in available equity between the ‘comfortably affordable’ and ‘only just barely affordable’ home in ten years’ time is anyone’s guess and not worth the risk or short-term financial pain IMO. The capital growth in the property isn’t money that you’re ever likely to get your hands on, and even if you do you’re probably going to spend most of it on… another house.
Also, borrowing up to your eyeballs with the hope that you’ll have future salary increases sounds pretty reckless to me. What if, in five years’ time, instead of a bigger salary you actually find yourself with 2 kids and a redundancy package? Plus, if you borrow more than 80% of the value of the home you have to deal with even more added costs for Mortgage Insurance.
Finally, with interest rates at historic lows, it might be worth considering a fixed rate loan? Watch out for additional fees for early repayments and stuff though. I have no idea if they still do that, I’ve been out of the industry for over 5 years. And I should add that I’ve never actually had a home loan and am in no way qualified to give financial advice. Unfortunately most of the people who are qualified are also getting paid commission to tell you bullshit.
This is so good. Massive thanks!
Y’all are champions.
Or, you could always move into a tent down at Darebin Parklands. Leave your LHT with it’s panniers and fenders nearby and claim you’re ‘touring’. It won’t cost you anything and you’ll always have a front row seat for DDCX!
But great info nonetheless.
I took all my poo change to CBA and put it in the coin counter. 68 bux! And they were very polite and helpful.
I always go into banks hostile and ready for a fight, and leave with a dazed grin on my face, wondering vaguely how everyone who works there is so nice.
^ I have all my banking with comm bank.
My bank guy actually came to my house a few weeks back to sign off paperwork relating to a car purchase. He also got me 5.4% on my mortgage.
Will be going through commbank for a second mortgage in the next couple of months. I can’t talk highly enough of them, I’ve always had excellent experiences with them.
Here’s another thing to consider,
While cash is king the queen is equity, buy in a great area that is an older established but up and coming area.
New estates have all the bells and whistles but are great short turn investments but they tend to burn themselves out.
Buy worst house best area but still somthing like the others have said that is very affordable then if you have spare cash pour it into the house, then in five years the house has gone up in value.
This then can be refinanced and go again or just sit back and be happy.
You’re better to own 3 $400k property’s then to own one 1.2k property.
This is how successful developers, property gurus have survived the gfc.
Also there’s some great advice in some of the wealth/realestate magazines.
Also warren buffet advice, people buy lots of shit when they are doing well and the market is doing well then sell when times get tough, we should buy when times are tough and sell things when times are good, this ensures you get maximum return for your $$$,
I used a broker for my home loan, he’s a great guy and doesn’t try to steer you in a direction that will only benefit him. He even came out a few weeks back just to re-jig our accounts - nothing in it for him, just part of the service!
The best thing for me was he cut through all the marketing bullshit and gave us a number of options that suited our circumstances.
I’ve sent JP his details, but if anyone else wants them, shoot me a PM.
My uncle is a big loan broker,
They have really good personal relationships with the right people and they do offer great deals and I also recommend brokers.