Hi Everyone,
My Fiance and I are First time buyers in the market. We are trying to decide if we should purchase an investment property and forgo the FHOG, or purchase a property to live in for 6 months so that we get the FHOG. We are currently renting with some friends and love where we live. We still owe $11k on a car loan and both have small credit cards. We would like to get into the market as soon as we can so that we can start building wealth for the future.
We are really not sure which way to go. If anyone can help it would be great.
Thanks
KirrilyHI,
in order to be able to give any real help, we would need to know a bit more regarding what property price range you are looking at purchasing, joint income, etc.
If you did buy a property and live in it for six months what would you do after the six months is up? That is would you be able to service the loan repayments as well as pay living costs for your alternative place of abode rent/board etc?
Some areas appear to be dropping in value as FHO find that they can't keep up with loan payments, if you are looking at these areas you may find that prices ease off in the coming months. Depends on who you listen to, a few conflicting opinions on property prices at the moment.
cheers
Sonya
Hi Sonya,
We have a joint income of $110,000. We would like to purchase something under 300k, however have a borrowing power of 500k.
If we were to live in the property for 6 months we would then move into one of our parents homes so that we can get enough equity to purchase another investment home. We would like to create enough equity for us to have a family and be financially secure.
Realistically even at a $300K purchase price you would probably need to have saved a minimum of $20K + FHOG (Maybe more depending in which State you are buying and whether there is any First Home Buyer Concession on the Stamp Duty).
Lenders will want to see this saved over a minimum of 3 months.
Alternative would be to look at getting your parents to either borrow against their security and then in turn lend these funds to you or use their equity as security and provide a limited guarantee.
Richard Taylor | Australia's leading private lender
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