Extra Cash/wage-mortgage%

[Sam_Boss260]

To those who are looking at buying and are a couple without kids, do your sums WITHOUT your partners wage.....because once you start having kids, you pretty much drop a wage and this is where people do it tough - when circumstances change.

Before we had kids we did as much as we could, renovations, bought the wife's car (family car) with cash etc. Then for the first 2 - 3 years with kids we struggled. I drove around in a $4k XF ute for a couple of years.

Now we are getting back on our feet. I'm earning a decent wage and the wife is trying to work part time. But you have to do your sums right. And don't over commit.

And yes, our wage to mortgage ratio is pretty high at around 40%. But my house is valued at around $900k, so it's all worth it.

[DanXR6T]

I think there is a large difference between people who purchased homes 8-10 years ago, and those looking at buying now.

The increased equity from the rapidly increasing property market placed these people in a pretty good position. But now with rising interest rates, new buyers unless in a rapidly rising area, would have to be willing to potentially survive 10-15years without any real increase in equity.

Thats just my thoughts.

Daniel.

[Sam_Boss260]

Yeah, we bought our place 6 years ago. But even if you have equity, you still have to "service" your level of debt. ie actually be able to pay it off.

I know a friend who "snapped up" a bargain here in Brisbane inner city. She paid $2.1 mill and claims that it was so cheap. Place is worth nearly $3 mill now, but she can't afford the payments and is paying interest only..... what is the point of that?

[blueoval]

With my situation, I have worked it out based on just my wage alone as the mrs doesnt work. Should we have kids we would still survive.

Best to never over commit as been said, but live within your own means.

We currently live with her parents. Not the best for everybody, but if you can handle it, its a good cost saver. We have also bought a house and its now being rented out so all is not lost in that front either. Its a little investment we have that we can either sell or perhaps refinance when we decide to build another house of our own.

One thing we didnt do is go nuts and buy the latest of everything straight away. Something many young couple fall into the trap of doing to either compete with the Jones' or are impatient.

[DanXR6T]

Originally Posted by Sam_XR6

Yeah, we bought our place 6 years ago. But even if you have equity, you still have to "service" your level of debt. ie actually be able to pay it off.

I know a friend who "snapped up" a bargain here in Brisbane inner city. She paid $2.1 mill and claims that it was so cheap. Place is worth nearly $3 mill now, but she can't afford the payments and is paying interest only..... what is the point of that?

Understood about having to service the loan, wasn't directing my comments at you personally, just in general.

My partner and I can service a loan as a couple for a theoretical average house in this town, but as I stated earlier if she lost her income then our house becomes 60%+ of my income, which is unaffordable really.

[Fev]

feelin the strain too, about to sell the house, dads been outta work for about 8-12mths now(high lvl jobs for an over qualified 55+ are hard to come by) and we just cant afford, nor do we need the house anymore.. interest on it is somthing like 22k per year, which means he needs to earn 44k to pay for it as its 48c/$1 tax on him.. damn annoying huh

[DanXR6T]

Originally Posted by blueoval

We currently live with her parents. Not the best for everybody, but if you can handle it, its a good cost saver. We have also bought a house and its now being rented out so all is not lost in that front either. Its a little investment we have that we can either sell or perhaps refinance when we decide to build another house of our own.

This situation seems to be quite common for younger couples - but yes, not everyone can live in this way. We could, but would mean we both quit our jobs and relocate - which isn't out of the question, but not ideal.

Good luck with it though!

[blueoval]

Originally Posted by DanXR6T

This situation seems to be quite common for younger couples - but yes, not everyone can live in this way. We could, but would mean we both quit our jobs and relocate - which isn't out of the question, but not ideal.

Good luck with it though!

Thanks mate, we've been doing this for 7 years now and we are reasonably comfortable.
We have our own seperate living area with own lounge, bedroom and ensuite with seperate entry so I dont have to see the outlaws if I dont want. Meals get cooked daily also.

Im just glad we get along when we can otherwise it would never have worked.

[XYGTHO]

Some interesting stories. If i base it on my before tax wage i'm at 42% which isn't to bad really. I'm putting away about $100 a week still in savings. I put another $250 per fortnight away for bills and i live on $250 per fortnight (fuel, food, beer, usually small things for the house etc). So really i'm not doing to bad.
Hopefully most of you have interest rates locked. Would be worse for the guys with variable rates.

[blueoval]

Originally Posted by XYGTHO

Some interesting stories. If i base it on my before tax wage i'm at 42% which isn't to bad really. I'm putting away about $100 a week still in savings. I put another $250 per fortnight away for bills and i live on $250 per fortnight (fuel, food, beer, usually small things for the house etc). So really i'm not doing to bad.
Hopefully most of you have interest rates locked. Would be worse for the guys with variable rates.

Yeah definitely did get my mortgage fixed for first 5 years. Was a mandatory requirement when we signed up.

My mate works at Westpac and he is involved with high income lending all the time. He tells me the most common request for loans over the past 2 years has been a fixed term. It rare as anything for him to come across someone with an alternative loan requirement.