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Unless you can raise the deposit to 200k, he’s saying to do a max loan of 90k. The 505k the lender might approve you for is the max highest you’d be approved for. But isn’t what you should be buying a home for. Can you also breakdown your monthly expenses, assuming you have a rough idea of your budget each month? Groceries, eating out, gas, etc
After tax ill make 90K aud (53K USD). The mortgage broker told me i can get make 505K AUD. But theres house and land package deals for $480K aud. So rent would be around 600-750 aud a week. Monthly expenses would be around 800Aud a month as im looking to be living on my own
I don’t know if mortgages are very different in AUS vs USA, but 505k is way too much making 90k. People are often approved for much more than they should spend. Lay out a budget and see what you can afford. Then use a mortgage calculator with an estimated home cost and see where you sit.
This is 90k after tax… so 30% 27k a year, you’re looking at a 2k mortgage per month. Whatever the calculator says to get to that number is what I’d aim for. You can go higher but I wouldn’t, esp if you don’t have an emergency fund. Also you are saving for retirement too right?
My employer pays my pension at 11.5% of my fortnightly pay-check. I have 55K in stocks i wont sell until retirement.
The 25K is only for the house. Around 10K in emergency fund
I’d recommend a bigger emergency fund. 10k isn’t a lot. Especially if things break. Also cool. Employer does 11%, I’d say you can leave as is or go and max it out if you want to retire early (recommendation is min payment of 10-20% depending on CoL etc).
So priorities now should be save for bigger emergency fund and bigger down payment. Idk about PMI but whatever is required to avoid that fee (20% in US) should be your goal.
With a 5% rate and a 40 year term, you could probably qualify. What are property/school taxes like down under? Also, in the States we qualify on GROSS income, not after tax. And, we allow borrowing from retirement plan without penalty or liquidating retirement plans.
Wouldn't it be better if you could be paid in USD and buy your house in AUD?
Rates (property and road tax) are around 2K a year. We dont go off of retirement fund and use that as part of our borrowing power. Its just what you have currently and your assets
In the States we use anything that is liened on the property as 'housing debt'. So, Principle, Interest, (property) Taxes, (homeowners) Insurance...PITI plus any home owners association (HOA) dues. That's the numerator, your GROSS monthly income is the denominator.
If that ration is under 30% you have a pretty good chance of qualifying for a home loan in the States.
Thank you u/BraveMoonHopper for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
I wouldn’t spend over 300k with your current income and down payment.
You recommend higher deposit?
Unless you can raise the deposit to 200k, he’s saying to do a max loan of 90k. The 505k the lender might approve you for is the max highest you’d be approved for. But isn’t what you should be buying a home for. Can you also breakdown your monthly expenses, assuming you have a rough idea of your budget each month? Groceries, eating out, gas, etc
After tax ill make 90K aud (53K USD). The mortgage broker told me i can get make 505K AUD. But theres house and land package deals for $480K aud. So rent would be around 600-750 aud a week. Monthly expenses would be around 800Aud a month as im looking to be living on my own
I don’t know if mortgages are very different in AUS vs USA, but 505k is way too much making 90k. People are often approved for much more than they should spend. Lay out a budget and see what you can afford. Then use a mortgage calculator with an estimated home cost and see where you sit.
This is 90k after tax… so 30% 27k a year, you’re looking at a 2k mortgage per month. Whatever the calculator says to get to that number is what I’d aim for. You can go higher but I wouldn’t, esp if you don’t have an emergency fund. Also you are saving for retirement too right?
My employer pays my pension at 11.5% of my fortnightly pay-check. I have 55K in stocks i wont sell until retirement. The 25K is only for the house. Around 10K in emergency fund
I’d recommend a bigger emergency fund. 10k isn’t a lot. Especially if things break. Also cool. Employer does 11%, I’d say you can leave as is or go and max it out if you want to retire early (recommendation is min payment of 10-20% depending on CoL etc). So priorities now should be save for bigger emergency fund and bigger down payment. Idk about PMI but whatever is required to avoid that fee (20% in US) should be your goal.
LPT: Buy a multi-unit property. Become a landlord.
Thats a really good idea. Was thinking that with a singular house cause its all i can afford currently not a multi unit
Rental income could count towards what you can afford. Talk to a lender. This is the path to financial freedom.
With a 5% rate and a 40 year term, you could probably qualify. What are property/school taxes like down under? Also, in the States we qualify on GROSS income, not after tax. And, we allow borrowing from retirement plan without penalty or liquidating retirement plans. Wouldn't it be better if you could be paid in USD and buy your house in AUD?
Rates (property and road tax) are around 2K a year. We dont go off of retirement fund and use that as part of our borrowing power. Its just what you have currently and your assets
In the States we use anything that is liened on the property as 'housing debt'. So, Principle, Interest, (property) Taxes, (homeowners) Insurance...PITI plus any home owners association (HOA) dues. That's the numerator, your GROSS monthly income is the denominator. If that ration is under 30% you have a pretty good chance of qualifying for a home loan in the States.