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Jake T.
Jake T.
Hillcrest, SA
2 Likes
0 Followers

I would like to get some advice on buying my first home … savings around $50,000 with a full time job as a teacher. I have been looking at properties around $375 – 400,000 and want to know if could buy a property on my own with the money saved or will I need a guarantor?

7 years ago

Responses

Hi Jake,
Thanks for your question and for using simplyaskit.
On the surface, it would appear that you are in a pretty good position to start looking for your first home, however there are a few fees and charges that you need to consider that will eat into your deposit.
This may mean that you might have to pay Lenders Mortgage Insurance which would be nice to avoid if possible. One common way to avoid this is, as you suggested, to have a guarantor.
Having someone to look at your current financial situation will provide you with some peace of mind and arm you with details like how much you can actually borrow. A pre-approval will assist you and costs nothing.
Feel free to touch base.
Regards
Craig Kitchen
KeyInvest Lending Services
08 8210 0000

Hi Jake

Quite simply, in terms of funds to complete, you have at least the minimum, which is terrific.
However, when borrowing over 80% of the value of the property you will be subject to lenders mortgage insurance, which is a bank charge and capped on top of your loan.
If a guarantor is available, this could be a better alternative, as it would remove the lenders mortgage insurance charge.
Is probably best discussed further.
Give me a call if you'd like to!

Ben Slater
Aussie Unley
*** ****
*** ****

Hi Jake,
I can see a couple of options open to you depending on whether you are looking to purchase an established property or build new. Funds required to get into an established property differ greatly to those required to build a home.
Have you looked at this as an option?
It is important to consider the $15k First Home Owner Grant which is available to you if you build new. Assured Home Loans currently has an additional 10,000 reason campaign for first home owners which we are offering. There are tips and traps with building you need to be aware of which our team can help you with to ensure a smooth transition into home ownership.
Feel free to contact me at Assured for further discussion.

Hi Jake,

To buy at $400,000 with a $360,000 loan, you would need to have a very strict budget with no other liabilities (eg car loan, personal loan, credit card, dependents etc) if you are on a teacher's starting wage in South Australia. So the answer depends on your exact circumstances. To summarise though, to buy at $400,000 in South Australia you would need to budget for around $30,000 in costs on top of your $40,000 deposit (total $70,000). This may come from the First Home Owners Grant plus savings if buying new. This is just an example of how 'tight' your purchase would be - in terms of income/expenses from the bank's point of view - as well as the deposit funds required to cover all costs of stamp duty, solicitor, Lenders Mortgage Insurance etc.

There are lenders that deal specifically with teachers, who will also give allowance through longer loan terms if you are wanting to maximise your borrowing power. They also take into consideration casual/contract employment a lot more 'gently' for teachers. It's important when considering a lender to also consider your borrowing 'personality', as you'll be dealing with the bank/lender for a very long time! Ethical lending (eg does your bank invest in fossil fuels?) and whether profits go to shareholders or members (such as a mutual bank operates) are often considerations that aren't discussed or thought about when first taking out a loan but can certainly add value to your lending decisions beyond the 'bottom dollar' (although that will always be your 1st priority!)

Please feel free to call me on 0400 794687 or email me at deb@teachershls.com if you would like more specific information relevant to your personal circumstances. Although based in Queensland, I deal with teachers nationwide.

Kind regards,
Deb Richards
BBus GDipEd DipFMBM
Teachers Home Loans
www.teachershls.com.au

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