Home Loans

[Guest FatBAt]

I started having second thoughts bout getting a loan for a new car, but spoke to one of the banks and they said its really hard even to get a loan for a car if u haven't got a credit rating let alone getting a couple 100k of them........

You will find a bank will loan you money a lot easier for a house than a car because even though they hold a lien over both car or property, land appreciates and a car doesn't. Safer for them. But I think you knew that anyway.

It used to be that banks looked purely at your ability to service the loan. They then went to just wanting enough equity (lien) to recover any losses if you couldn't service the loan. Now they want both. Things are much tighter. The up side is, the longer you stay with the one bank, the more influence you have over them. When you negotiate, they do listen.

...and good luck with the house by the way.

XR06T

...you make a good point. The FHOGS should be on a sliding scale. The less you earn the more grant you are eligible to. A couple on say $150K shouldn't get any....to a single on $30K to get $20000.

I should be treasurer. A Liberal that helps employees. I know. I'll start my own party and call it The Libours....or Laberils.................Nah. A party name that sounds more like a disease or a female body part would NEVER take off.

Cheers

[XR6T8080]

Hi Mate,

There are alot of factors that come in to it when getting a home loan, the main two being your income and assets. If you could over come the personal loan before you go for a home loan it will definetly help you out. Don't forget the interest accumelated for say 20k tacked onto a 7.34% homeloan will infact be a hell of a lot more over the say 30 year term then it would be if it was a seperate personal loan for 20k over 5years at say 10%.

Does that make sense?

you know theres two ways of looking at that, I would have said the same thing about combining a personal loan with a home loan 6 months ago, but if you actually do the sums, and work out how much cash flow you free up in the meantime, which you can save, and then work out that your property will probably make double that personal loan back in the first 12 months anyways (I.e. your loans paid out effectively in 12 months, and yes the interest is still there I know) then I really think its the way to go (combine the two). and also that you'll probably refinance your house loan in 3 - 4 years anyways, as long as the rates are lower.

BUT... if you look at the world economy at the moment, and read between the lines a bit, even though our property market is still going along very steadily, I would be very cautious about property in the first place (have you watched the stock market in the last 4 weeks ???)

but not having a go at your comment on combining the two, it does make sence.

[Dillz]

BUT... if you look at the world economy at the moment, and read between the lines a bit, even though our property market is still going along very steadily, I would be very cautious about property in the first place (have you watched the stock market in the last 4 weeks ???)

Steady is probably not the word I would use at the moment. We are experiencing record sales at the moment with lots of cashed strapped mums and dads paying crazy prices further out from the city because city prices are through the roof.

A good example of the market is and acre of land we sold for 300k in seville, in three months we relisted it and sold it to the first purchaser to look at it for 350k. This is happening more often than not and with the share market all over the place I belive alot more investors will be pulling out and jumping back into property. But I'm not saying I would, if the sh*t hits the roof like 89 alot of money would be lost in property.

Edited 23/01/08 01:12 AM by XRTPSI

[Guest newl]

the sh*t hits the roof like 89 alot of money would be lost in property.

That's what I'm waiting to see happen. I'll feel comfortable jumping in again after that.

[SCRIBR]

that's when uncle scribr jumps in to profit off the poor people

[Azid Rush]

turned into quite the discussion hasnt it

yet, I have another question:P

What about building.... How do the loans work for building homes?

Can U get the one loan that pays for the land, and the price of the house or do U have to get a loan to buy the land and another loan to cover building costs?

Quite unsure about the whole building process as im thinking of building instead of buying

[Guest FatBAt]

turned into quite the discussion hasnt it

yet, I have another question:P

What about building.... How do the loans work for building homes?

Can U get the one loan that pays for the land, and the price of the house or do U have to get a loan to buy the land and another loan to cover building costs?

Quite unsure about the whole building process as im thinking of building instead of buying

I have found that building a home can be cheaper than buying an existing home, if you can find a builder that is efficient and erects in a reasonable amount of time.

You have to take into account rent as being dead money though. But the upside is you get exactly the home you want.

Senario:

Assuming 80% LVR (Loan / Valuation Ratio) This is the amount the bank will loan against the property. Any higher and they want loan insurance.

Lets say you want to buy a block of land for around $220000. To put a 4 bedder on it will cost circa $200000. The bank may loan you what you need. You will need a larger deposit though.

What the bank requires is a quote from the builder stating the final price. They will ask you what the house will be worth if it were finished. They will do a (conservative) valuation on the land so you can't over inflate your estimate too much. If you say $500000. They will loan $400000. (500000 / 80% = $400000). If you find a bank that will loan you 95% - $475000. Loan insurance is generally in the low thousands and can be incorported in the loan. Personally if I were you, I would get the insurance if it ment they loan more, just to get you into the market.

When your house is being built, the builder asks for draw down payments. Usually about four payments of 25% or thereabouts.. Try and choose a builder that asks for a draw down after the slab is poured. Some want there 1st before work commences. Sucks!

I do not know your situation so I can't advise. But in my opinion (experience) to build in a new area as oposed to buying in existing will see your value increase faster. If the market is steady, sell the house as soon as the area becomes established. I made over $100000 in 2 years (1 house) by doing this. It was a high value area though.

I recently bought a block of land in a boutique estate. It was advertised at $215000 and I said I would give them $210000. The agent said that there was a buyer willing to pay full sell price so I offered $220000. The agent didn't beleive me and asked if I'd sign something to the effect. We one it. 3 months later the block next to ours which is the same dimentions sold for $250000. You will not get that sort of growth with existing.

There are so so many variables that can effect the outcome.

Do your homework. We are very lucky where we live (Lake Macquarie near Newcastle) because I can jump online to the councils website and do a full check on the land before I buy. What are the building restrictions if any, fire hazards, land classification. It is all available but most areas you have to ring council and ask. It is not that hard to read through the gobildigoog, you just have to know what to look for.

Most of all. It can be difficult at times but it is fun. I get a rush out of it.

Can I ask where you live and is there any major develoments in your area?

Cheers

[Guest FatBAt]

I have spoken to a couple of people about the "over-inflation" of houses. One guy, who has quite a few properties, told me that it is true that the prices are over inflated. But when prices hold steady or drop this will only affect high end & middle range houses. Lower range houses (< $320k) won't be affected, as the demand for these houses will still be there.

Seems to make sence to me.

I'm not by any means having a go at you SCRIBR. I just replied cause it relevant.

I can't understand how they say houses in some areas are over inflated. What people are willing to pay determines a properties worth. Nothing more. Buyers aren't stupid. If a house IS over inflated, it doesn't sell untill you drop the price. It just means the SELLER is niave (or greedy) to what the real value is.

If someone buys a house at or over the asking price, that means they LOVE the house or they see the future growth. See my last post above.

Saying a house is over inflated is like saying a Stradivarius is only made of wood and cat gut or a Piccaso is only paint and canvas. Land is only dirt.

I just hate (some) real estate agents. They only talk about over inflation so you will drop your price before it goes on the market so THEY can get a quick sale. They tried it on me and I almost fell for it. I changed agents and made another 15 grand in 2 months after it sold. Cause iit sold for its true value (the selling price) and not just the asking price.

Unless someone can convince me otherwise, there is no such thing as over inflation. A house is worth what a buyer is willing to pay.

Cheers

[Azid Rush]

hey fatbat cheers for that, explanation was not too shabby.

Im in raymond Terrace and thinking of building in the new riverview ridge development. It is the newest built area in town and u can get good size blocks of land for around 180k and decent size blocks for around 155k

[Guest FatBAt]

hey fatbat cheers for that, explanation was not too shabby.

Im in raymond Terrace and thinking of building in the new riverview ridge development. It is the newest built area in town and u can get good size blocks of land for around 180k and decent size blocks for around 155k

Fool me!!! Shouda looked at your avatar. We're almost neighbours.

Riverview Ridge is a fantastic estate. There are some decent sized homes there and that's a really good sign. A great place to start and good on you.

I have a commercial broker that I have used for years. He now does home loans and he is honest as the day is long.

If you like, you can PM me if you need any advise. I'm all too happy to help or point you in the right direction. Like I said. You have to know what to look for when buying a block of land.

Cheers

Steve

PS....I noticed you want to buy not too far from BlackTrack. .....Honey? Im just steppin' out for a bit....