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Help for first home buyer!


Guest steve4870

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Guest steve4870

Hello everyone out there. I need some help as I cant get the information I need from any bank or Lending Company. My Wife and I would like to get ahead and buy a house. Now what I would like to know is what Combined Income we both need to get a loan. We have 3 young children. I have tried many ways to find out this and no luck. I hope someone has been through this and could give me some information. I would be greatly appreciated. So here is an example: We would like to buy a house for $500,000........Ok we need money for a deposit and also stamp duty, Insurance etc. We have 3 children. So the next step is what Income does my Wife and I need per year to apply for this kind of loan. Eg: Combined Income: $60,000, $80,000, $100,000, $120,000 or $160,000. I really would like some facts and just cant seem to get the answer. I hope someone out there can help me.

 

Thank you Steve

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I find the mortgage calculators on websites fairly useful, try this one http://www.aussie.com.au/borrowing-calculator.htm

 

The question you should be asking however is what the repayments on your mortgage will be and how much you think you can afford, as the banks will sometimes lend well in excess of what you should borrow (somehow they think hubbie and I can afford a $1.5m mortgage - I can assure you we certainly cannot)

 

So, $500,000 assuming a minimum of 5% deposit is a loan of $475,000 + LMI say, $10,000 and you are looking at a loan amount of $485,000 - repayments on that will be $2,400 - $2,500 per month depending on the lender.

 

You'll find that your combined income can be fairly low for mortgage companies to lend you that amount, either one salary of c$110,000 or a joint income of $50,000 and $45,000 will give you a similar outcome.

 

That joint income brings home $6,600 per month, take that chunky mortgage payment out and that leaves you $4,160 to live on.

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Assuming you are in Oz, just go to any of the display villages and go to any display house and ask for the details of their mortgage advisor. They all have one they prefer.

 

You also need to approach it differently. There is no point in trying to figure out what income you need for a $500k house. You need to look at it as what can your income afford.

 

But, to give you an idea, we are about to build a house for just over $500k. My income is $175k plus bonuses and I would say $500k is the max we can do on my income.

 

If your not in Oz, then on the main site pomsinoz there is a section for ask NAB - one of the biggest banks.

 

I am curious though as to why you are so intent on a $500k mortgage.

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  • 2 weeks later...
Guest gold vision financial

Sorry this may be a bit late as I have been away - But in short income to service is dependant on how many expenses you have and family size and how much income each earns. As each person is normally entitled to the first 18K tax free so two smaller incomes will service more than one large equal income. Therefore putting you situation through a servicing calculator two income of $ 50,000 will service fine with 3 kids where as a single income of $ 100,000 just meets serviceability. So if you have additional expenses on $ 100,000 you may not qualify thus requiring restructuring or using an alternative lender.

 

This is based on a 95% lend and that you have sufficient funds for loan mortgage insurance (LMI) and other expenses such as stamp duty, bank fees and settlement costs etc. Some of these expenses can be negated by being entitled to the FHOG ie no stamp duty payable on a home value up to 500K in WA. (each State is different)

 

so really it is best to speak to a broker who can not only run through everything with you but also source the most appropriate loans suitable to your circumstances.

 

if you need further help just let me know

 

John Horvath

Finance Broker/Adviser

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