I am seeking some advice from hopefully people who were in my position before...
I have managed to obtain more then my 10% deposit and I have no kids or debts and own my own car...My job runs on contracts over 1-2 year then I must search for new contracts but they pay fairly well..
What I am asking is what should I be doing.. I have put my money in a high return savings account but wondering if I should stay renting (my rent is very cheap) or look for a house now.. My aim was to gather enough (20%) so I don't have to pay the mortgage insurance and have that wasted money paid off the house when I choose to buy.....
I am living in Newcastle area ..
I have heard that the Aussie dollar will fall out of the ass by the end of the year and I am hearing of this housing bubble bursting (but still don't know how that will affect me)
My goal is to buy a house (not new) soonish within the next 1-2 years and then pay off as much as I can and then use that to buy and rent another house......
I would appreciate help and tips from people who have been where I am .
I am nervous to have a massive debt over my head of maybe 400.000 but also excited to start looking at a new part of my life..
Very much new to this and I am slowly reading all I can to gain information...
My ideal place and house is in the 700.000 area but my first would be between 320-420 then slowly build up to having my dream home..
Please any tips ,websites, threads to read that could help would be very much appreciated..
Firstly you need to decide is my employment sound enough, do you get new contracts quickly, are your services constantly in demand. Sound so like they are from the limited information you posted.
Having a 10% deposit is a good start for a First Home Buyer. If you could reach 20% that is great however many people find reaching 20% hard as the price growth over the 1-2 years to save this money may leave you with around 10% deposit still. If the market falls well that would be great for you to increase the deposit %. However I don't see prices falling much in NSW seems prices there are set to continue to grow for now particularly Sydney. Not sure how Newcastle is going, last I heard it was doing very well in terms of jobs and growth.
In this low rate environment with banks actually decreasing rates it is hard to see any substantially falls in property prices. It is more likely you will see continued growth over the next year or so until rates start to rise. So if you are in a good position you can get yourself a fixed rate for 3-5 years for under 5%, hard to look past such low rate offers over an extended time period if you want fixed payments.
So in short I see very small chance of prices falling in your area over the next 1-2 years while prices could continue to keep rising easily in the present environment. Who knows maybe you can snag a bargain with some solid research. Over the longer term, no one really knows what will happen with prices, it is just a guessing game based on people's personal view points and experiences.
My personal experience is it is always scary at first but once you make the plunge and by you are rarely disappointed.
I am seeking some advice from hopefully people who were in my position before...
If you are worried about the market getting away from you, monitor an area that you wish to buy in. See how many houses you can afford, what they sell for and how long they stay on the market. Keep a spreadsheet, watch the trend. This is better that just following the median price.
Ignore predictions on the future price of anything (the dollar, property etc). They are just the opinions of others. The price of anything is the price right now. If the dollar was a certainty to fall in value over the next six months, it would have already fallen.
If you are buying a house to live in, you don't make money if it goes up in value and you don't lose if it falls. You still have the house and other properties will have moved in lock step.
Once you have bought, kill your mortgage as quickly as you can. Every extra dollar you pay off the principal saves you money over the life of the mortgage.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
I am seeking some advice from hopefully people who were in my position before...
I have managed to obtain more then my 10% deposit and I have no kids or debts and own my own car...My job runs on contracts over 1-2 year then I must search for new contracts but they pay fairly well..
What I am asking is what should I be doing.. I have put my money in a high return savings account but wondering if I should stay renting (my rent is very cheap) or look for a house now.. My aim was to gather enough (20%) so I don't have to pay the mortgage insurance and have that wasted money paid off the house when I choose to buy.....
I am living in Newcastle area ..
I have heard that the Aussie dollar will fall out of the ass by the end of the year and I am hearing of this housing bubble bursting (but still don't know how that will affect me)
My goal is to buy a house (not new) soonish within the next 1-2 years and then pay off as much as I can and then use that to buy and rent another house......
I would appreciate help and tips from people who have been where I am .
I am nervous to have a massive debt over my head of maybe 400.000 but also excited to start looking at a new part of my life..
Very much new to this and I am slowly reading all I can to gain information...
My ideal place and house is in the 700.000 area but my first would be between 320-420 then slowly build up to having my dream home..
Please any tips ,websites, threads to read that could help would be very much appreciated..
The best time to buy a property is when you can afford it. Prices go up and they eventually also go down, but if its for you to live in long term thats all irrelevant.
Reiwa.com.au lets you subscribe to certain suburbs to receive all the listings to your inbox. Subscribe to the area you are looking at to get a good idea for what the prices are doing in that area.
A number of home buyers I speak to who have transacted in the last few years are buying investment property and yet live with their parents or rent.
The rationale given is that the interest is tax deductible and therefore it is possible to borrow enough to buy something which, in the long term, should grow in value.
It is just plain weird, and it does not pass the smell test.
I have stopped asking “And how exactly do you propose to pay back that great big lump of principle before interest rates start to rise or prices start to drop?”
It seems the former is thought improbable, and the latter impossible.
A number of home buyers I speak to who have transacted in the last few years are buying investment property and yet live with their parents or rent.
The rationale given is that the interest is tax deductible and therefore it is possible to borrow enough to buy something which, in the long term, should grow in value.
It is just plain weird, and it does not pass the smell test.
I have stopped asking “And how exactly do you propose to pay back that great big lump of principle before interest rates start to rise or prices start to drop?”
It seems the former is thought improbable, and the latter impossible.
You are basing your argument on two events that are both highly unlikely. The chances of higher interest rates in the next 24 months is in my opinion close to zero. Price drops are highly improbable.
You are basing your argument on two events that are both highly unlikely. The chances of higher interest rates in the next 24 months is in my opinion close to zero. Price drops are highly improbable.
Nobody knows the future so it is always best to have a contingency that accounts for possible rate rises and possible price drops.
Every time rates go up, some people get wiped out. They are generally the ones who have borrowed as much as they could afford when they purchased and didn't allow for rate rises. The other consideration to make is your own job security and pay level. If you are earning more for your trade or profession than others in the same field, assume that at some stage, you may end up earning less.
When I bought my first home, I factored in a 25% increase in mortgage repayments or a 25% fall in income. I then worked out what I could cut back on if such a scenario arose.
Interest rates fluctuations can be negated with a fixed rate but it is important to overpay as much as possible during the fixed rate period.
The trap many fall into is that they buy more of a house than they need to buy and overstretch themselves. If you are single, you probably don't need a 4x2 with a theatre room.
Price drops and rises don't matter if you have bought a house to live in. They only matter if you start seeing your home as an equity release plan. A lot of people fall into that trap and run up debts in the belief that that they can always sell up to cover those debts if need be. I know many who have fallen into that trap. My dickhead brother has owned his house for 30 years and is still mortgaged for 80% of its value. Never use your homes equity for discretionary spending.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
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