My husband and I are both 36yrs with a young family of 4 children living in Sydney. We have never owned a property and currently rent. Sydney prices and coming up with a deposit has proven difficult. 2 of our children attend private schools. Does anyone have any suggestions of how we can launch into the property market even if only on a small scale at first. Any suggestions would be great. We both work full time and gross $135K pa.
A good way would be to obtain a loan and purchase a property. These days you can borrow up to 106% of the purchase price if you are solid income earners. 106% finance is expensive and I would advise avoiding it if possible.
100% loans are readily available but you will need a few thousand dollars (depending on purchase price) to cover costs (and many thousands of dollars if you are not eligible for stamp duty discounts like in NSW).
97% or 95% loans are also available if you have some deposit but costs for mortgage insurance etc can be expensive.
The higher interest rate loans like the 106% and 100% are good to get you into the market and you can refinance out as soon as you have enough equity to get into the cheaper products.
Talk to a good mortgage adviser and they will help you through. No deposit lending is very common place these days.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
Robert,
Thanks for the advice, do you suggest we just visit a regular mortgage broker and explain the situation and what we are trying to achieve and be guided by the figures they come up with. Can you point us in the right direction, our brother in law has a mortgage broking business however we are reluctant to involve family in our finances.
Any advice would be helpful, as we are really very conscious that our yearly salary increases will not keep up with the current 10% pls of fee school increases. We desperately need to look at other alternatives.
Do you know much about the changes to super laws as at July 1 2005. I have about $40K in my super which I was considering using to assist in getting into property. Whilst I know that a super fund is unable to borrow is there a way in which I can guarantee the loan to assist in a property purchase. Your thoughts ???Cheers
It is your choice whether you use family or not. There are a lot of great mortgage advisers on this site and you could probably easily find one. You will know whether they are professional or not by what they tell you and how they tell you your options. If there is any doubt, you could always post the information on here and get lots of different broker perspectives. If you prefer to keep the information private, choose a broker or two from the site and email them directly with more information (They are bound by the Privacy Act for your protection). Most are more than happy to help even if you go elsewhere to put the paperwork through.
Regarding superannuation, although I have just finished a financial planning diploma, I do not consider my knowledge suitable enough in that area to be of any help to you. An accountant my be more appropriate. I found Mark Unwin (Steve and Dave’s accountant) to be very good. Email him at [email protected].
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
Hi Leewh,
Congratulations on wanting to improve your ‘lot’ – already you are a step ahead of many people in Oz.
To me the key issue for you both to address is where is your current income going? I always advocate people investigate their current habits to see if they are living within their means, inclusive of having some funds to regularly invest.
The easiest way to do this is for you and hubby to do up a household budget to determine how much (if any) you have in discretionary expenditure. A careful analysis of your spending habits may realise some realistic savings that can be made. There may need to be some ‘sacrifices’ made in order to facilitate this.
See the following thread for some idea of sacrifices others have made
https://www.propertyinvesting.com/forum/topic/14051.html
Earmark the savings and, if possible, some extra funds towards an investment program. Sure this may take some time but the more you become focussed on your future then the easier the achievment of your future becomes.
I wouldn’t be unduly worried about using your brother-in-law as your broker, provided he is familiar with the needs of investors, has access to a number of lenders, and you both can keep the relationship on a business level.
You can utilise your superannuation funds to assist with the purchase of investment property.
In a nutshell you establish a self-managed self manged fund, a trust and then use the super funds as a deposit and the trust borrows the balance (with you as guarantor) so that the property is fully financed between you and the super fund.
Please note that this is not something that should be done without specific and expert advise as the penalties for non-compliance, with respect to SMSF are considerable.
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping.
I would guess 4 kids with 2 in private school would cost a huge amount per annum. I admire you for being able to afford all that.
Robert Bou-Hamdan
Mortgage AdviserM: 0414 347 771
E: [email protected]
W: http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter: See – http://www.mortgagepackaging.com.au/index_files/newsletter.htm
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltd
Have you got any outstanding non-investment debt? If so I suggest you pay this debt of first. Any repayments you have for that once paid off continue to put into an account for a deposit.
With most lenders you need to show savings and with buying a property it runs about 5% of purchase price for costs so you need some money behind you.
Start reading a few books as there are lots out there with good information and the most important is to start.
You have shown by posting here you want to improve your situtation more then a few Aussies.
Personally I start by investing in Managed funds until I got enough for a deposit. This shows you can saving and make the repayments for the long.
ChrisAll post are IMHO.
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