Hi all,
well this is a first for me so hopefully I dont make a fool out of myself. I’m 25 years of age and I have wanted to get into property for ages, but to be honest, it is pretty daunting. I am a pretty positive person but I can’t say the thought of (what if it doesn’t work hasn’t crossed my mind no less than 1000 times). I am very strict with my finances and always have been. I dont earn all that much per annum so I am wondering what is the best way to get into the market, I have a few thousand dollars for a deposit, but I am worried that the banks won’t lend me enough. Does anyone have any suggestions
Hi Guitarchick and welcome,
I would speak to a reputable mortgage broker, get a referal from friends or speak to one of the great brokers on this forum.
They will tell you what you can realistically borrow/afford. The fact that you don’t earn much but have saved some money will look good for you.
Well done for making the moves to go forward financially.
As far as investing goes read as much as you can, but try not to over load yourself. You can learn a lot from this forum by doing searches on previous posts.
Good luck,
Sue [biggrin]“Be careful not to step on the flowers when you’re reaching for the stars”
Hi,
Firstly, don’t be afraid that the bank wont lend you enough, be afraid that they’ll lend you too much! [blink]More important is to do up a budget and figure out how much money you have spare each week (or month). This info is largely part of you loan application anyway. But the good thing is it lets you see how much debt you can carry assuming no income from the property (or until you can live in it).
Once you’ve worked out your budget you should be able to see what position you are in and you’ll be better able to see what price range you are looking at and so on.
To answer your nagging doubt: What if it doesn’t work? Well you can sell it and move on. Not that big a deal really. Just research. One of the best indicators of how easily you can back out of an investment by selling is to see how much a bank will lend against that asset. The banks have that same question as you do: What if it doesn’t work? and so they’ve worked out how likely they will get their money back from any given loan. Unless you gain additional insight into a particular asset, you can follow the bank’s opinion, after all they are the ones who’ll lend you the money
Use the loan calculators available at the bank web sites along with your budget and you should be well equipped in regards how much you can spend. Then work out what you are trying to buy (quite important). As in are you trying to buy equity for future business loans? Are you trying to buy an alternative to renting? Are you trying to buy a cash flow? etc…
Have a think about what you want from this property.
If a quick gain then the market might not be suitable at this point. However if you want a long term home that will appreciate as the market rises (or depreciate if it falls) then it might be the right time.
All the best,
Simon Macks
Finance Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
You should try to establish a good credit rating so you can borrow large amounts of money quickly on an unsecured basis.
If you don’t alredy have a good credit rating , open checking accout at several banks. Find those whose loan officers are friendly and interested in helpin gyou establish a credit rating of through borrow small amounts of money. I believe there will plenty of banks in your area to deal with, and banks are in a keenly competitive business so YOU are the BOSS and don’t be afrid to get up and walk out of a bank that is not reponsive to your needs and wishes.
Hope this helps
We are giving away the free reports and audio files by Robert G. Allen for the next 3 months. You can email me for the free reports and audio files.
[email protected]There is a saying in the banking business: “We don’t give unsecured lines of credit to bullfighters, parachutists, and real estate investors”
Be prepared to answe these questions when you apply for such a loan:1. What is your income?
2. Do you keep your income tax returns
3. The bankers would like to know why you are borrowing, and you should let them know that you are borrowing so you can invest in something that will increase in value.
4. Can you verify your down payment requirement
5. Have you borrowed any portion of your down payment?Hope this helps
We are giving away the free reports and audio files by Robert G. Allen for the next 3 months. You can email me for the free reports and audio files.
[email protected]Jackhu,
Advising Guitarchick to apply for personal loans in an effort to substantiate a credit rating is reckless advice, to say the least.
Further debt would only hinder Guitarchicks ability to service a mortgage not enhance it.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Originally posted by JackHu:You should try to establish a good credit rating so you can borrow large amounts of money quickly on an unsecured basis.
Is this some kind of joke or the result of a bad e-trip?
If you don’t alredy have a good credit rating , open checking accout at several banks. Find those whose loan officers are friendly and interested in helpin gyou establish a credit rating of through borrow small amounts of money.JackHu,
Your US based advice is largely irrelevant for Australia. There is no such thing as positive credit records in Australia unlike the US.
Hello Guitarchick,
Good luck with approaching banks for a mortgage. If you know what your borrowing capacity is, it’ll make the searching for a property a whole lot more fun.
If you have difficulty obtaining a loan because of low income, consider this:
In Tassie the State’s Dept of Housing has a program for home owners who find it difficult to get a conventional mortgage. It is called a HOAP loan (Home Ownership Acquisition Program?). The Housing Dept helps you obtain a mortgage through a bank at usual mortgage interest rates. I’m not sure, but I think they act like a guarantor. It’s designed for low income earners. You can use the loan for any property, it doesn’t have to be a government house. It might be worth checking out if you find banks difficult.Good luck
Hi Guitarchick
I also have a low income but save a lot. I tend to make sure that after the deposit and costs, I will still have a suitable amount of cash on hand (in a redraw or offset account) for emergencies as I can’t rely on my income. It’s true that you can borrow just about as much as you want with lo and no doc loans. Just make sure you’re comfortable with the repayments and buy well within your means for the first one if you’re nervous about it. If it still goes wrong, just sell.
Good luck
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