I m doing some R&D and googling on how much money is required upfront to buy house worth $500k with 95% home loan.
Thanks
Edit 1: Yes,i'll need to pay LMI since i m talking about 95% of home loan.
Edit 2: here is image from android app for home mortgage calculation.
https://files.ozbargain.com.au/upload/67386/38509/s60407-122…
Thanks. I should have made myself clear. I was asking for information on upfront cost and I m from Melbourne. Also updated post accordingly.
go to whoever you bank with and spend 30 mins with their loans officer. That's what you pay them for.
My opinion? If all you have is 5% then maybe save more and lower your sights. I think a bank that lends to you based on just 5% is probably doing you a disservice.
A few years ago I banked on a $100k deposit on a $500k place meaning a $400k mortgage and the monthly repayments werent a lot of fun. That's without LMI and the fhog and stamp duty waive.
If you are borrowing 95% you will also be hit with mortgage insurance which I estimate would be around $10,000-$15,000 thrown into your home loan.
Yep, agree.
Curious to know, does the full amount of Mortgage Insurance get sucked up by your deposit immediately or is it pro-rata'd over time?
LMI can be capitalised into the loan.
you can calculate your approximate LMI from the following table.
https://www.homeloanexperts.com.au/lenders-mortgage-insuranc…
Note there is a big jump if you borrow more than 87% for loans upto $500k. last time when I refinanced, I asked my broker to keep my loan amount to 86% only so I stay clear of big jump in LMI.
Your Loan Mortgage Insurance (LMI) on a 95% LVR Home Loan will also be astronomical (an uneducated guess would be $20k). LMI is only required for home loans 80% LVR and above. The higher the LVR, the more exponentially expensive the LMI becomes (as you become a greater risk of having a debt greater than the house value).
Maybe could be avoided with someone else willing to lay down some serious collateral as a guarantor?
No, unless you're talking about enough cash to bring the lvr to 80 or below.
So you have to pay LMI for 80% LVR? Didn't it used to be >95% LVR?
Please link me this so I can have a further read. This is for NSW.
Recall it was closer to 75-76% previously.
http://www.yourmortgage.com.au/calculators/mortgage_insuranc…
Says 80% is sufficient.
$50k.
$25k deposit
$23.5k stamp duty (unless you are a 1st timer buying new)
$600 building inspection
$400 utilities connection.
plus any moving costs.
Your mortgage provider might role the stamp duty into the loan, but if you do that, the LMI and stamp duty on top of the $500k make it a total $540k ish purchase with a correspondingly higher deposit required.
On top of this:
$800 - 1.5k solicitor cost.
for what? lol
for purchasing :)
Conveyancing Costs
Yep, bank on $1k per transaction at least. Then bank on termite pest inspection, strata report if you buy a unit.
Costs just add up but hey, beats renting.
$23.5k stamp duty (unless you are a 1st timer buying new)
may be wait for this?
https://www.ozbargain.com.au/node/242032
You'll be waiting a long time. Every year the various state Chambers of Commerce suggest it (not to mention academic economists).
The current WA treasurer, in a previous life as the head of the IPA, suggested replacing SD with LT in the 1990s. Now he's the treasurer and even he won't change it.
Thanks guys. Currently renting so if I wait another year, I'll pay approx 20k in rent. Or I can buy now and pay LMI approx $12k. So rent savings should nullify LMI. Sounds okay or am I missing something here?
While renting you are not paying rates, building insurance or property maintenance. So these need to be taken into consideration as well.
where you based ?
if in Victoria, happen to be around be Glen Waverly/Mount Waverly then try RAMS Office there (look up branch)
I know someone who was in same boat as you incl budget.. able to get loan. Quite good bunch of ppl there..
https://www.rams.com.au/rams-mt-waverley/
solicitor cost is quite low as franchise owner himself is..
If you go there, can say "neeti' mentioned about you.
Thanks. Just checked their rates N its bit higher compared to rate with other banks.
They can negotiate further with westpac
Not sure about your circumstance but you can save a lot of money if you plan it out right. Eg if you live in a house share your $450/week can drop to $225, $150 etc. $150/week is $7800/year, giving you $15k/year to put away towards a house. It would then take around 6 years to save the 20% deposit, no LMI and smaller total interest payments (as you borrow $430k rather than ~$500k ($475k+other costs)
Thanks. That option is not feasible.
yes….but the house that was $500k is now $700k
Always try to get on the property ladder instead of feathering somebody else's nest with your hard earned money. Although property values fluctuate the overall trend over the years is only upwards ( just as your rent repayments will be if you don't get on the home ownership ladder)
Initially it is a struggle but well worth it knowing it is only you & the bank who owns it - not a landlord who wants regular property inspections which although very entitled to do , are an intrusion to your personal life.
Also as you gain more income, pay it into the mortgage to pay it off faster..
Our home bought 25 years ago on mortgage for $ 140,000 is now valued at $2,000,000. Lots of improvements & extensions done - all paid with hard earned money, ploughed back into our investment.
Also buy in either a well established area or an up & coming one where the local shires are investing a lot on upgrading.
In total or up front?
Total amount will likely be close to $1m over 30 or so years.
Up front will be your deposit ($25k), settlement fees (~$1.5k), mortgage fees (~$750), stamp duty (use an online calculator, I don't know where you are, let's estimate ~$7k), plus other stuff I can't be bothered thinking about right now.