First Home Buyers share their stories on their recent purchases
Dave & Jo (26 & 25 years old) recently purchased their first home in Queensland about 26kms north of Brisbane
How did you find out about Louise and her services as a mortgage broker?
We attended one of the conferences that she held in Brisbane about buying properties. Her service was fantastic, going above and beyond teaching us about the steps required for buying a home.
What % of a deposit did you save for your first home?
You did not use a parental guarantee I believe so you had to pay Lenders Mortgage Insurance? Is that correct?
Yes we paid for LMI. It was an additional $8,000 but was worth it to get into the market a bit quicker.
How long have you been looking for a property?
Since early September this year.
I believe you were going to make an offer that was considerably more than what you ended up paying for the property?
The original listing price for the property was 550k and as we liked the place we were willing to offer close to that price. After discussing it with Louise she talked us into offering 500k first. After giving the first offer they were reluctant in accepting it since it was their first week on the market. We later offered an extra 14k and said it was our best offer and that we couldn’t go any higher. Giving it some time, they accepted the offer. It was thanks to Louise that we were able to start low in the bidding and greatly reduce the price we paid.
How much value do you place on the services of a mortgage broker?
Very high since she gave us more than just the best loan deals, she also guided us on the step by step process on how to purchase our first home.
Louise made the process much easier and less daunting.
Danielle & Luke (early 30s) recently purchased their first home in Frankston, 1 hour south of Melbourne
How long have you been saving to buy this property?
My husband Luke and I started re-building our savings following our wedding in early 2016. That said, we also had a really fun year last year that culminated in a big holiday in December 2016, so if I’m being honest, the “real” saving started from about Feb this year!
How did you hear about Louise and when did you first meet with her?
Louise was referred to us by our good friend Dane. He spoke really highly of her so we reached out very early on to try and find out where we stood from a lending perspective, and to seek advice on how to set ourselves up for the big purchase!
As a first home owner, did Louise have some suggestions for how to save and get your deposit sorted – things you hadn’t thought of?
Yes – lots! Luke and I were both pretty clueless when we started the process, and so in that sense Louise was amazing in helping us out with all the must-knows! Apart from “spending less and saving more”, she also gave us hints and tips as to how to best present ourselves to the lenders: reduce credit card limits, detailing all transfers between accounts, and not to make any withdrawals from the long-term deposit savings account.
Had you made any offers prior to your Frankston purchase?
Yes, we made one offer on a private sale, and bid at one auction before getting lucky on house number 3! The property we’ve purchased was supposed to be auctioned, but we put in an offer that was accepted in advance of the auction date, which was a great result. Of course the buying process is nerve-wracking, but we knew our limit, and stuck to it, which takes out a lot of the uncertainty.
Do you think using a mortgage broker made the process easier and gave you confidence?
Definitely. Louise has guided us through the whole process, and answered all our questions in real time. Give where you are spending. Make the decision to go for another house – either upgrading and renting out your first home or buying a holiday or investment property. Consult your accountant (who hopefully invests in property) to decide the best structure and whose name to purchase in considering tax implications. Next meet your mortgage broker to establish how much you can borrow and carefully plan a spending budget so you know how much rent return you need to make for this purchase to work best for you.
Consider insurance – if you want to purchase an investment to let through AIRBNB or a holiday home, you need to carefully consider the owners corporation restrictions in a building and the insurance as it may be more challenging than for a primary residence. Houses vacant for more than 30 days may void their insurance policy so be mindful.
Beware of flipping as a strategy. What sounds like a fantastic way to make a quick buck, often turns to heartache as expectations when relying on tradespeople are rarely met and lenders are not going to make any money as it takes two years to get a return on a mortgage from you so will be loathed to lend. This strategy requires really careful planning work as borrowing and interest repayments can make it very painful.
Also, relying on interest only repayments, needs to be carefully thought through especially when APRA has made this a difficult choice for investors and lenders are clapping their hands for joy as they raise rates willy-nilly. If you plan on holding a property, what is going to happen once the first 5 years of interest only have finished? Can you afford to sustain the property once rates increase? If not, how do you time selling yet holding long enough to have made money?
There is nothing sadder than someone who has held an investment property for years and ended up being forced to sell when the market has a slight downturn so have made nothing from their efforts. You need to be able to hang on no matter what the world throws at you so that requires planning from the start. Sadly too many buy but never consider their long term goals, spending or change their budget.
So buying that second or third property requires a good bit of work and none of it starts at realestate.com.au