Buying A House

[XYGTHO]

Gday. I am and have been looking at buying a house for quite some time. Just wondering if anybody has any pointers or tips. About loans, repayments, looking at houses ect. Fixed loan or variable? If you have any general info list it or any house buying stories. Peoples recommendations. :

[Peter T]

I have just switched my loan to a fixed rate for 10yrs, but only 80% fixed, and 20% variable, which seemed to have some advantages for my situation, maybe worth looking into, ?? other than that, TELL them what you want regarding rates and fees etc, it is a buyers market, and I was suprised at what they came to the party with,!

[EA2BA]

Get an inspection done thats for sure when you think you found the one you want and the vendor has accepted your price.
negotiate the price, only pay what you want (well as close as possible).
check out the street the house is in and surrounding streets, you can tell alot about a neighbourhood by how people keep the yards.
find a house that will suit what you want, dont settle for 2nd best or you will always want to move, might take longer but worth it.

Fixed or Variable, that depends if borrowing near your limit go fixed so you know what whats in repayments for a few years, if you think rates will go up, go fixed as well. You can mix loans as part fixed, part variable as well.
You want to consider a loan that allows interest only payments should you need to get through a tough time.
FEES makes sure you 100% understand all possible fees on your home loan.

Legal costs, rates pro rata, establishment fees for the loan are all things to work out as out of pocket stuff you may have to pay out, try have a $2,000 fund to cover these sitting on the side.

DO not forget stamp duty, that can be the worst expense of the lot

[4.9 EF Futura]

Originally Posted by XYGTHO

Gday. I am and have been looking at buying a house for quite some time. Just wondering if anybody has any pointers or tips. About loans, repayments, looking at houses ect. Fixed loan or variable? If you have any general info list it or any house buying stories. Peoples recommendations. :

Having worked with the credit risk frameworks of a few lenders over the past years, I would offer a few observations about the loan origination process:

If you can minimise borrowings to 20% of the purchase, it makes a whole world of difference. The lender wont make you purchase lenders mortgage insurance (save thousands) and you'll be in a better position to negotiate. For a lot of young australians, the home buyer's grant disappears into lenders mortgage insurance. That's 7 grand, gone, to benefit the bank - not you.

No lenders mort insurance and the grant will be available to cover surveyors, documentation fees, panel valuers... maybe some spare change to take a bite out of that loan.

If 20% is unreasonable, dont stress. Try 15% or 10%. But give it your best shot. Seriously - every less dollar you have to borrow will work in your favour.

Got a deposit account somewhere? Put it into the house!!! Yes, you'll lose that 6% return on the funds... but you'll make an 8% saving on the funds you didnt have to borrow. You'll be ahead by 2% on those funds.

Haggle! Haggle! Haggle!! If you're a "good deal" on paper, they should be able to knock half a percent of the standard rate. See if they'll sharpen their pencil on some establishment fees - or see if they offer to defer them (i.e. you'll only pay the establishment fee if you refinance elsewhere within a few years, not for everyone - but worth considering). I cant stress this enough - the worst they can say is "no". And if you're a "good deal" on paper - they know that any other lender will be happy to lend to you.... and that if you threaten to take your business elsewhere, there's a good chance you will.

It's no dark secret - the banks are slitting each others throats to get business. Like Peter T said - its a buyer's market... so take advantage of it!!

Shop around. Home loans are basically a commodity, but there is still some differentiation to be found. Try a few different styles of lenders - big banks, regional banks, credit unions, building societies.

Got a good rate quoted? Get them to put it on paper, see if anyone will beat it.

Fixed vs variable... is a matter of opinion. If you think interest rates will be going up, then look at a fixed rate. If the fixed rate is higher than where you see rates headed.... then dont. If you think rates are coming down soon - then dont fix the rate.

[Mechan1k]

I made sure I didn't have to pay lender's mortgage insurance.

But ... if you get a property that is worth over $500,000 ... then the first home buyers grant is void ... it is only available for properties under $500K (in NSW anyway).

So I missed out on that one. Bugger.

[XR06T]

would you guys recommend getting a mortgage broker or are they more likely to do what will nett them the most commission??

anyone got any expierence with them? are they privy to the same deals that you see advertised on the tv, eg lower interest rate if you pay directly from your pay etc??

[XYGTHO]

Thanks everyone sme really good info so far. Will definetly be borowing more than 20%. LOL. I am looking at getting a place under $250,000 so will get first home buyers grant. Can't afoord to get a loan anymore than about $210,000 as i'm a single buyer and only 21 with a ***** wage. I have saved up enough though for a 20g deposit and have a bit left over. Its all good info, don't know this stuff unless youve been through it i suppose.

[XR06T]

saving 20g is a good effort mate!!
i managed to save ~10k and am currently building..
you just gotta make sure that it is not going to impact on your life too much because payments on 210k are gonna be $370 a week!

[EA2BA]

we used Aussie mortgage broker when we bought our house, they do what you want and have contacts to help things along a little more smoothly and quickly we found.

you say i hate ANZ, they remove them from your choices even it would give them more commission, they also have to disclose what comissions they get and how they get it, it costs you nothing to use them out of your pocket.

They do save you having to goto every bank, and they download new rates etc every day.

Personally I say use them, but others may have a different opinion.

ALSO ... add at least 2-3% on the rate they quote if you can still pay it back then borrow what they say, if you cant pay it back and live, then lower your amount, no point getting the money, getting the house, then a month later rates go up and you are stuffed.

[4.9 EF Futura]

Originally Posted by XR06T

would you guys recommend getting a mortgage broker or are they more likely to do what will nett them the most commission??

anyone got any expierence with them? are they privy to the same deals that you see advertised on the tv, eg lower interest rate if you pay directly from your pay etc??

A broker originated loan still needs to jump through the various 'hoops' for the lender - i.e. you still need to meet their lending standards.

The benefit is that they will "shop around" for you... their earnings come from commissions from the banks, so its at no cost to you.

Some brokers will get a great rate from the lender, depending on their relationship.

Like most things credit-related... it's horses for courses. If you're a "good deal" then i wouldnt bother with a broker... if you're just scraping over the line, or if you're too busy to shop around yourself... then its worth looking into.

Will definetly be borowing more than 20%

Lol, sorry for the confusion. I meant - see if you can save 20% or more and borrow 80% or less.

$20k is an extraordinary effort - any lender will be impressed to see that you've put that much away, especially if you have statements that show the accoutn building up over time. Keep putting it away whilst you find the house that you want.

A young bloke who has saved up that kind of money must have his head in the right place - you'll be fine mate.

[4.9 EF Futura]

Originally Posted by EA2BA

they also have to disclose what comissions they get and how they get it,

Lol, on the topic of FSRA and disclosure....

I am NOT authorised to provide financial advice, specific or otherwise. These are general comments, not specific to your situation. I am not a financial planner. I do not receive any commissions.

:

[TZENU]

I too am in the market for a property but there are two of us going for the mortgage (girlfriend and I). One thing that my mortgage broker stresses to me is your ability to service the loan. (being 23 i'd like to budget to spend money on my car, going out to nightclubs etc!) So you have to be prepared to lose one or the other....
Also the more you have saved (as genuine savings) the more products become available for you. So you can jump around from product to product to better suit your needs.

[Sledgehammer]

Hi Guys.

I,ve been a mortgage broker for last 11 years and if you would like any information send me a pm, I have assisted many folk here on FF.

Can operate in alll states and assist as necessary.

For privacy pm is preferred naturally.

(oh and their is no fee that we charge for our service)


Stuart Brown
Provincial Home Loans

[XYGTHO]

Sorry if this is a stupid question but what exactly does a braker do? Find the best rates etc?

[TZENU]

Originally Posted by XYGTHO

Sorry if this is a stupid question but what exactly does a braker do? Find the best rates etc?

In a nutshell a mortgage broker finds out for you how much you can borrow. They then find a loan that matches your borrowing power with a hopefully low interest rate. etc. They also calculate all the costs associated too and your weekly repayment, how much interest etc..

I know there is much more but that is basically what they do!

And it doesnt cost you a dime either!

[Falchoon]

I used a broker when I got my house loan, sure saved a lot of hassle (and possibly $$). I wouldn't hesitate to use one again.

[dutchy]

Just brought a house in Geelong 3 weeks ago . Nat. Bank was great . Fixed for 3 years good rate . Can fix again for standard fee in 3 years . But most of all check titles for covernants and get a builder to inspect and with written report of any probs . This is great bargaining power and can make owner responable for permits as well . Otherwise you will be responsable for all permits and repairs after settlement . Rush into nothing . Relax , check everything and bargain . Market is slower now . Lots of sellers . Hopeing this helps . And dont forget the garage can never be too big . Cheers Timbo .

[XRchic]

We bought a house in July 2005, after looking into building. Building was going to be a better option financially in some ways, but the delays were so huge that we would not have saved any money due to an extra year of rent. We bought an almost brand new house, with everything all done. Paid a bit more but a lot less stress.

With stamp duty, and all the fees, and the deposit we had to put in around $50K of our own money to get the place.

I would say, these are the main things I have learned:

- be very aware of how much your repayments will be at a minimum;

- if you think you are going to earn more in later years, stretch it a bit early on, because it is easier to do it that way early and struggle a little bit, and then catch up later when you earn more than sell up and get something better down the track...

- mortgage brokers rock - they save so much time and effort with forms and applications and things like that

- know what you want before you go looking, ie how many bedrooms, what kind of yard, how many garages, what type of heating/cooling, floor coverings, etc....

- if you have rented a lot or moved a lot, make a list of the things that you know you DONT LIKE in the houses you have been in so you know what not to get, ie cheap taps/fittings, cheap non washable paint, carpet (I hate carpet), small laundry, west facing, not enough phone/power points, poorly accessible from outside, low fences, air con unit too big (too much power use), too dark inside, etc, etc (there are heaps of things, I could go on and on).

- find out why the owners are selling if possible

- general services in the area, ie bus stops, shops, schools, condition of the roads around and general infrastructure.

Good luck!

[haycait]

As I think has been said...don't buy an established house without a pest and building inspection, even if the lender doesn't require it. It will cost you a couple of hundred but may save you thousands!!! Also if funds permit get a independant valuation from a valuer, not a real estate agent. Aain this will probably cost a couple of hundred but may save you thousands on the negotiations for purchase if you find a place you like.

Don't be afraid to ask questions!! From all parties including the agents, brokers, vendors etc... It is far better to ask a silly question than make a silly mistake!! because silly mistakes with real estate can cost you big time!!!!!!!

It absolutly is a buyers market so haggle with everyone for everything from purchase price to loan fees etc.

Best of luck - hope it all goes well for you.

Cheers
Haycait

[ronwest]

Originally Posted by XYGTHO

any house buying stories.

There's plenty of advice around regarding loans etc but the best tip I can offer is NOT to look for the perfect house and then find it.

We've bought a few houses over the years and my focus has always been flexibilty. Find two or three houses you would be happy to call home and decide what price each is worth to you.

There is nothing quite as expensive as a house you "must" have.

We bought our last house around 5 years ago. At the time, we had four houses on our list in preferred order.

We made an offer on the first house on the list on Thursday night with the proviso that the offer expired at 5pm on the Sat afternoon. I told the r/e's that they were not to call me with a counter offer as my offer was final and at 5pm Saturday we would make an offer on the second house on our list.

At 4.10pm Saturday the r/e rang and asked if we could meet vendors halfway between our price and their price. I told the r/e no and not to call unless our offer was accepted.

R/e rang at 4.45pm with acceptance of offer.

If vendor had not accepted our offer I would have quite happily made an offer with a short expiry period on the next house on our list... and if need be, the next.

[XYGTHO]

Originally Posted by ronwest

There's plenty of advice around regarding loans etc but the best tip I can offer is NOT to look for the perfect house and then find it.

We've bought a few houses over the years and my focus has always been flexibilty. Find two or three houses you would be happy to call home and decide what price each is worth to you.

There is nothing quite as expensive as a house you "must" have.

We bought our last house around 5 years ago. At the time, we had four houses on our list in preferred order.

We made an offer on the first house on the list on Thursday night with the proviso that the offer expired at 5pm on the Sat afternoon. I told the r/e's that they were not to call me with a counter offer as my offer was final and at 5pm Saturday we would make an offer on the second house on our list.

At 4.10pm Saturday the r/e rang and asked if we could meet vendors halfway between our price and their price. I told the r/e no and not to call unless our offer was accepted.

R/e rang at 4.45pm with acceptance of offer.

If vendor had not accepted our offer I would have quite happily made an offer with a short expiry period on the next house on our list... and if need be, the next.

Very smart buying. :hihi:

[XYGTHO]

All is being takin in. Just like to be as prepared as possible before doing things like this. Geese it took me two years to find the right XY. Lol.

[Sledgehammer]

Originally Posted by TZENU

In a nutshell a mortgage broker finds out for you how much you can borrow. They then find a loan that matches your borrowing power with a hopefully low interest rate. etc. They also calculate all the costs associated too and your weekly repayment, how much interest etc..

I know there is much more but that is basically what they do!

And it doesnt cost you a dime either!

Yep, thats pretty much the deal. It about having an interest in what your clients would like to do as well, my role is to help someone through the purchase as its not done every day. I usually find that the r/e agent is more inclined to lean toward the vendor (as is his job) and the purchaser is left to fend for themselves, this can be particularly intimidating for the first time buyer.

[EA2BA]

Originally Posted by XRchic

- if you have rented a lot or moved a lot, make a list of the things that you know you DONT LIKE in the houses you have been in so you know what not to get, ie cheap taps/fittings, cheap non washable paint, carpet (I hate carpet), small laundry, west facing, not enough phone/power points, poorly accessible from outside, low fences, air con unit too big (too much power use), too dark inside, etc, etc (there are heaps of things, I could go on and on).

Alot of things can be changed later on so go and price them now so you know the associated costs (use them to bargain with), things like the hot water service have about a 10year life span so check the age of that so you know it may be up for replacement.

check water pressure, make sure your contract lists everything that is to stay in the house like the dishwasher and oven.

When you think you have found the one you want, try and see it at different times of day and night, and take many different people with you, they will spot something you have missed, like say cracked tiles, and ask them to be 100% honest in the opinion they give, you may still buy it, but at least you know.

[EA2BA]

Its just like buying your first car, if it's not new, you get all bright eyed and ignore the faults, then they come back and bite you in the ***.

[MoreHPformyXR6]

Originally Posted by ronwest

There's plenty of advice around regarding loans etc but the best tip I can offer is NOT to look for the perfect house and then find it.

We've bought a few houses over the years and my focus has always been flexibilty. Find two or three houses you would be happy to call home and decide what price each is worth to you.

There is nothing quite as expensive as a house you "must" have.

We bought our last house around 5 years ago. At the time, we had four houses on our list in preferred order.

We made an offer on the first house on the list on Thursday night with the proviso that the offer expired at 5pm on the Sat afternoon. I told the r/e's that they were not to call me with a counter offer as my offer was final and at 5pm Saturday we would make an offer on the second house on our list.

At 4.10pm Saturday the r/e rang and asked if we could meet vendors halfway between our price and their price. I told the r/e no and not to call unless our offer was accepted.

R/e rang at 4.45pm with acceptance of offer.

If vendor had not accepted our offer I would have quite happily made an offer with a short expiry period on the next house on our list... and if need be, the next.

That's a good call I do the same if its for sale. If its up for Auction you cant do that (but you do decide what its worth to you)

[EA2BA]

phone/water/electricity all cost money to get connected / re-connected as well.

[It'sTheVibe]

Originally Posted by ronwest

There's plenty of advice around regarding loans etc but the best tip I can offer is NOT to look for the perfect house and then find it.

We've bought a few houses over the years and my focus has always been flexibilty. Find two or three houses you would be happy to call home and decide what price each is worth to you.

There is nothing quite as expensive as a house you "must" have.

We bought our last house around 5 years ago. At the time, we had four houses on our list in preferred order.

We made an offer on the first house on the list on Thursday night with the proviso that the offer expired at 5pm on the Sat afternoon. I told the r/e's that they were not to call me with a counter offer as my offer was final and at 5pm Saturday we would make an offer on the second house on our list.

At 4.10pm Saturday the r/e rang and asked if we could meet vendors halfway between our price and their price. I told the r/e no and not to call unless our offer was accepted.

R/e rang at 4.45pm with acceptance of offer.

If vendor had not accepted our offer I would have quite happily made an offer with a short expiry period on the next house on our list... and if need be, the next.

Ballsy. You should be working as a buyer's advocate.

[max]

In terms of your actual property choice NEVER lose sight of the three most vital issues: Location. location, location.

[old_mate]

sledgehammer might have to give you a call soonish...missus and I want to be buying this time next year. I have no idea how people getting into the market now are managing. Are we all buying the cheapies and moving onward from there? I figure buying on Brisbanes southside, a nice 3 or 4brm home with 550sqm block is going to cost me something in the order of $340 000. For someone at 22 years of age thats a bit of cash. We have probably 20g saved now, am hoping to have 35g before seriously looking around