Hi guys,
My first post and You guessed it I'm after some advice.
My partner and I are looking to buy a house for 800k and have one in mind, we have both worked extremely hard and have saved/earnt a good deposit of 500k.
My partners take home pay is 1200 per week net and i am a stay at home mum (just had our first bub), anyway the problem i have are that stamp duty is going to be 30k dollars.
We can get a discount of 15k dollars in the northern territory ie no stamp duty up to 350k but you need to be a first home buyer and my partner bought and sold a house when the grant first came in( the only house either of us has ever had).
All up we are looking at having to pay 30k but if i was able to get the loan myself we could save 15k on stamp duty and get the FHOG meaning we save 22k.
Are there any creative ways of getting around this problem…ie why am i going to be punished because my partner had a house once, can you get half a grant and half concession etcor can i get the loan in my name and he be responsible for the payments?Please help this is a lot of money and we have worked hard so any advice would be appreciated, I dont see why we should miss out because we worked hard and took risks and made sacrifices
Would it be possible to get a no documentation loan or a loan somehow where i take out the loan to get the grant even though i am not working and have no income right now and my partner makes the repayments, is this possible and legal?
These figures are a concern to me;
Traditionally, Banks wouldn't let you borrow more money than was going to use more than 30% of your nett income. Now they have gone a little higher with standard loans – 35% in most cases; and that was for ALL loans (car etc).
This means they don't believe you can live a decent lifestyle if more of your wages are used than this percentage. there is a good likelihood of financial stress.
If you buy an $800k house, put in $500k, your interest alone on the $300k loan, at 7.5% will be around $432 per week. What about the Principal payments?
That is 36% of your take-home pay. Interest rates are still likely to rise further in the near future.
After you add around 5-6% to the purchase price ($40k), and assuming you borrow this with your house loan, your repayments blow out even further. Even if you do get the FHOG, this seems a bit precarious.
You now have a young baby, and not including any other debt (car, credit card?) I think you will be finacially stretched to do this.
You may even find that your situation won't get finance approval from the Banks using the standard loans, and if you need to resort to Lo Doc or No Doc type loans to get the finance, you should probably question whether you can really afford it.
What if your husband gets laid off, or hurt.
No offence, but I don't think you can afford this much house on your income, even with a big deposit.
I would be looking to buy a $500k house, and spend another $50k to make it look like a $1 mill house.
Thanks for the response…we also have another 150k cash we can access in a company account if we were to get into any trouble, he has a permanent govt job aswell and we have insurance if he was to be ill or lose job
My question was that want to try and get reduce as much of the stamp duty and get the fhog therefore reducing added expenes of 40k down to 15k or so.
I would think a loan of 300-350k would be quite normal nowadays otherwise how are first home buyers able to afford to buy, not many would be taking home 1200 a week?
I admit i have no experience in property purchasing and havent tried to get finance, in fact dont even know where to start.
This house is an 800k thou house but in one of the best suburbs in this city on smack bang on the beach….other houses along the 3k stretch of road range from 2 mill to 15 mill we plan on renovating it over the years..its a bit of a dumpThanks again for your response though
This is a real tough one, I can see where your coming from Fiona, and also where some other people are coming from with the risk.
Well you've got insurance with your husbands job, so no need worrying to much about that.
You might have to take up a small part-time weekend job to get a little more income(note:you pay small tax on this as you'll have a low income), that may help to get the house.This one is really up to you, if your able to get the loan and make the sacrifices necessary then go for it, it looks like you'll be in the money big time over the next 5-10 years, excellent.
800K property, 500K deposit, 300K loan, the bank should lend you the money, the only reason they don't lend is because of risk. If they have a 300K secured against an 800K property that would look very good from their point of view.
Your main concern here is servicibility of this debt that you will acquire.
Chris.
Hi Fiona. Please don't take this the wrong way, but the FHOG is meant just for that. To help first home owners 'stuggling to save a deposit and costs' to buy their first home. There are numerous people that still cannot, or have done so in the past and never received any grant at all, and are thus now still ineligible. I would hardly think someone that has 500k plus extra funds stashed away and wants to buy an 800k property would be too put off by stamp duty – unfortunatley it is a 'tax' we are stiffed with whether we like it or not. Also, your partner has taken advantage of this before, so it is not as if you have both missed out. While I hear of people applying for loans in their own name and 'forgetting' to add on partners/children/dependants etc frequentl;y remember on the FHOG paperwork, you do have to declare if you have a spouse, and all their details too. You can be as 'creative' as you wish, but regardless of how you view doing so as far as ethics goes, if it can be proved later you had a mate/partner/spouse/defacto whatever later at the time of the property purchase, you will have a sizable debt and penalty to repay , perhaps at a time when you have no funds to do so – meaning you may in turn have to sell your house!
That said, congratulations on what you have both managed to achieve so far, and your hard work. ….and enjoy your new home.Hi Fiona,
In response to your question, yes there are low doc and no doc products that would enable you to get a loan, but your husband would not be able to be on the title. In terms of your serviceability, I have to disagree with the other posters on here, I think a $300k loan is well within your capabilities, particurlarly given your strong cash base as you said should anything go wrong (there is also of course income protection insurance and your own potential for returning to work at some stage).
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044I agree with v8Ghia and Cameron, forget about the FHOG, you have to pay stamp duty so just pay it. Get income insurance(if not already) and just accept that over the next few years you may have to go back to work. With that said enjoy your home and I wish you the best of luck with your purchase.
Chris.
Hi Fiona
Regardless of whether the loan is in your name or not, you are not eligible for the FHOG or the stamp duty concession. Neither of these concessions are available in the NT (and probably all of Australia) if EITHER you or your partner has ever owned their own home before, regardless of whether the FHOG was used. To state anything else on the forms would be fraudulent.
Just out of interest, where did you get the figures of 2 – 15 mill for other properties on that road?
Cheers
K
Hi again Fiona
I just reread my post and it sounded very harsh. It is certainly not meant to be. I spent a couple of years in the NT and worked through exactly this issue with some friends. Your partner does not have to be your married partner or even de facto at the time you sign the documents. They just have to be considered by people who know you as your partner. The test is a bit more legal than that but that is the essence of it.
Cheers
K
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