First Home Buyer Question VIC / FHSSS

Rilo 117 on 23/09/2024 - 11:47
Last edited 23/09/2024 - 13:11 by 1 other user

Hi all, I'm currently saving via the FHSSS, ~$25,000 saved via it (pre 15% tax when I pull it) over 5 years so far, currently putting $700/month towards it. I live in Victoria; 1st home buyer grant (FHBG) will also provide ~ $10k + reductions in stamp duty I believe.

Houses I'm looking at are around $300k range ± $20k. Which as basic 2-3 bdr homes in 'meh' areas. I live in country Vic.

I'm 35, Single, co parent 2x kids, $95k income (currently doing Uni degree part time, 2 more years and my salary will go up to $110k upon completion).
Only debt is 14k car loan. Emergency fund of $10k (2-3 months expenses).

My question is, am I in a good spot to start the process of buying a house? It's always been a thing of 20% deposit to avoid LMI, and I'm probably just shy over 10% with both the FHSSS and FHBG.

Or should I hold off another year or two and save more? I'm a little mindful of my age and having a mortgage so late aged, my 20's didn't have the best financial choices.

Appreciate any insight and help.

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  HentaiEnjoyer on 23/09/2024 - 12:01

  +3

  Why not also consider utilising the Victorian Homebuyer Fund? I went through the scheme and it allowed me to significantly reduce my loan amount, and hence interest rate, repayments, and also avoid LMI which sounds to be one of your objectives.

  Financially, if you can get the pre approval amounts sufficient for houses in your price range, and can sustainably meet the estimated repayments in relation to your take home pay, I would say that defines that you're in a good spot for sustainable home ownership.

  It's another question as to whether you find your disposable income acceptable, after repayments. That will be a question for you and your goals, including savings goals and how much money you need to fulfill the lifestyle you want (travel, nice cars, hobbies etc.).

  Wishing you the best mate.

  • 

    Rilo 117 on 23/09/2024 - 12:54

    Thanks I'll have to do some research into it, I have seen it but not really considered doing it.

    I believe with repayments, it will only be an extra $250-800/month (depending on 15/30yr) a month on top of my rent cost (rent atm $1250/month), which I can afford, without considering LMI. So, with my currently situation it'd have to be a 30year. Looking at LMI calcs online it ~$4000.

    Having to pay LMI isn't a huge deal for me, I just knew it was something I would have to navigate through, and thought better to get my foot in a door in the housing market and pay it then potentially hold off. As I heard a quote recently where it's all about 'time in the market, then timing of the market." and due to coming in at such a late age, I Dunno, I feel a bit of pressure :P

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      Dolt2020 on 23/09/2024 - 14:14

      My son and his wife just bought their first with assistance from the Victorian Homebuyer Fund.

      no LMI and only 5% deposit required. If lender approved and approved to buy with the VHF (that is, they still have allocation available) you can choose up to 25% for the equity amount (ie, the bit that Vic contributes towards the contract price).
      It is stated to end this financial year , being tossed over to the federal goverments intiatives (yet to be implemented and currently being blocked by the greens and libs)

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  djsweet on 23/09/2024 - 12:02

  +3

  I wouldn't hold off to save LMI. LMI is an added expense, but it is unlikely to come to more than the property appreciation in the next few years while you are trying to save more.

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  freefall101 on 23/09/2024 - 12:44

  +1

  $10k for FHBG is only for new homes, not pre-existing. Should be eligible for no stamp duty though.

  As mentioned above, look into the VHF. Smaller loan, no LMI, only downside is the government owns a quarter of your house (and thus gets to enjoy that growth in value). But particularly in your current situation, interest rates are a bit higher and your income is likely to go up in a couple of years, it seems perfect. Once your salary goes up and hopefully interest rates come down then start piling extra cash into a savings account (or, preferably, offset) to eventually pay off the VHF.

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  SteepDiscount on 23/09/2024 - 13:35

  We used first home buyer guarantee scheme in 2023 to buy our first home. It allows you to buy your first home with as little as 2% or 5% initial deposit and no LMI. You have to meet income criteria to be eligible. Please have a look at it as quota fills up very fast.

  From the website,
  Only singles with a taxable income of up to $125,000 per annum and couples with a combined taxable income of up to $200,000 per annum may be eligible (taxable income as shown on the Notice of Assessment issued by the Australian Taxation Office)

  https://www.housingaustralia.gov.au/support-buy-home/regiona…

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  Duckie2hh on 23/09/2024 - 15:08

  -3

  salary will go up to $110k

  that humble brag

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  brendanm on 23/09/2024 - 18:39

  With the way prices are going, you will be better off just paying the LMI and getting something asap.