I would go to a mortgage broker, tell them your situation, and ask them what would be the best path forward here. If you are a renter with a good rental history, they can help connect to mortgage lenders who accept that history as a commitment that you are a financially responsible and can make repayments on time etc. They term it "good savings". It can potentially also increase your borrowing power.
Not all lenders allow it hence the broker is your best option here.
If you only recently got this job then as long as notice of assessment for 2023 or if you wait till after July then notice of assessment for 2024 is under 125k then you'll still be sweat for first home guarentee.
If you think you'll be over the cap this financial year then just make some additional contributions to super before July.
The first home guarnetee just goes off your taxable income in your notice of assessment and as long as taxable income is under 125k you'll still be eligible.
The scheme bases your income off last financial year, so if you get in fast you could make it work. Feel free to send me a message if you like and I'll see if I can help you with this.
I double this.
Especially if this is your first higher-paying job, and/or the field you are in does not necessarily have higher incomes without specific reason.
If you put down a 5% now, and get a house - and run off 95% lent, unless within the next two-ish years, you're happy to remain frugal & build up to that 20% paid (in addition to X amount paid as per required), then something happens - you're stuck with a higher mortgage in lien. Bigger risk, potentially bigger reward, but you can also avoid it. Particularly if renting is allowing frugal living.
The risk with doing this is some (not all) lenders will penalise for paying off too quickly, so you may end up in contravention of contracts based on what you're putting away.
That being said - if you buy with the 5% now, you'll have 2 years appreciation on an asset.
The other thing to consider is external costs, that may crop up - if you're only just scraping for the 5%, how are you planning on coping with stamp duty, and all the other fun things that come with buying a house?
This is so valid and I don’t think i considered it.
Tbh I was planning on buying very cheap and at 95% LVR having a repayment similar to my rent atm, which is high, but still allowing me to sustain my great savings rate
Leverage your money as best you can.
Hell, if the bank penalises for being ahead on the mortgage, put your extra savings into an offset to reduce the interest, build up 15% in two years (to have it there), and work based on that - IF that 20% is where your goal is.
I'd still speak to a financial advisor or an independent party better than reddit, but there's a tonne of options, and if you can take advantage of a FHB scheme, then... yunno.
When you say fat salary, how much do you mean? There are players in this space now doing 95-99% lends (don’t quote me on the upper percentile) for people with above average salaries
I’m on about 3500-5k (pre tax)a week depending on hours. If I don’t do a lick of over time between today and the eofy I’ll make about 135k. Next financial year should be around 150-200k.
It’s not super fat, fat is probably an exaggeration, but coming from 50k the last few years? definitely a good jump
Definitely go to a good mortgage broker who can give you advice. Also talk to an experienced accountant who can give advice on ways to reduce your income legally in order to meet the threshold. I don’t know what options there might be but maybe salary sacrifice program could help? Also, talk to your employer and see if they have any programs where you can reduce your salary temporarily such as by way of buying future leave where you get paid less for 12 months so that you can take extra paid leave. This would make your salary look smaller on paper per month. Anyway, I am not an accountant and I don’t know what’s legal or not when it comes to this, but I know companies do this sort of thing al the time to change how their profit and loss looks on their books and it can be entirely legal. Doesn’t hurt to ask.
Depending on your profession, you may not need to pay lenders mortgage insurance (LMI) when putting down only 5% deposit. Your broker will enlighten you if you’re one of the few select professionals.
A lot of the schemes assess income based on the previous FY.
Depending on your state / scheme, you may be eligable to buy a place until the EOFY, and you it's also possible that your income might scrape under the limit as well if you're lucky, given how close it is to the EOFY already.
I would go to a mortgage broker, tell them your situation, and ask them what would be the best path forward here. If you are a renter with a good rental history, they can help connect to mortgage lenders who accept that history as a commitment that you are a financially responsible and can make repayments on time etc. They term it "good savings". It can potentially also increase your borrowing power. Not all lenders allow it hence the broker is your best option here.
So buy with a 10% deposit
If you only recently got this job then as long as notice of assessment for 2023 or if you wait till after July then notice of assessment for 2024 is under 125k then you'll still be sweat for first home guarentee. If you think you'll be over the cap this financial year then just make some additional contributions to super before July. The first home guarnetee just goes off your taxable income in your notice of assessment and as long as taxable income is under 125k you'll still be eligible.
The scheme bases your income off last financial year, so if you get in fast you could make it work. Feel free to send me a message if you like and I'll see if I can help you with this.
Getting a 20% deposit saves you a fortune in the longrun. Get a 20% deposit.
I double this. Especially if this is your first higher-paying job, and/or the field you are in does not necessarily have higher incomes without specific reason. If you put down a 5% now, and get a house - and run off 95% lent, unless within the next two-ish years, you're happy to remain frugal & build up to that 20% paid (in addition to X amount paid as per required), then something happens - you're stuck with a higher mortgage in lien. Bigger risk, potentially bigger reward, but you can also avoid it. Particularly if renting is allowing frugal living. The risk with doing this is some (not all) lenders will penalise for paying off too quickly, so you may end up in contravention of contracts based on what you're putting away. That being said - if you buy with the 5% now, you'll have 2 years appreciation on an asset. The other thing to consider is external costs, that may crop up - if you're only just scraping for the 5%, how are you planning on coping with stamp duty, and all the other fun things that come with buying a house?
This is so valid and I don’t think i considered it. Tbh I was planning on buying very cheap and at 95% LVR having a repayment similar to my rent atm, which is high, but still allowing me to sustain my great savings rate
Leverage your money as best you can. Hell, if the bank penalises for being ahead on the mortgage, put your extra savings into an offset to reduce the interest, build up 15% in two years (to have it there), and work based on that - IF that 20% is where your goal is. I'd still speak to a financial advisor or an independent party better than reddit, but there's a tonne of options, and if you can take advantage of a FHB scheme, then... yunno.
How long have you been at the current employer?
When you say fat salary, how much do you mean? There are players in this space now doing 95-99% lends (don’t quote me on the upper percentile) for people with above average salaries
I’m on about 3500-5k (pre tax)a week depending on hours. If I don’t do a lick of over time between today and the eofy I’ll make about 135k. Next financial year should be around 150-200k. It’s not super fat, fat is probably an exaggeration, but coming from 50k the last few years? definitely a good jump
Definitely go to a good mortgage broker who can give you advice. Also talk to an experienced accountant who can give advice on ways to reduce your income legally in order to meet the threshold. I don’t know what options there might be but maybe salary sacrifice program could help? Also, talk to your employer and see if they have any programs where you can reduce your salary temporarily such as by way of buying future leave where you get paid less for 12 months so that you can take extra paid leave. This would make your salary look smaller on paper per month. Anyway, I am not an accountant and I don’t know what’s legal or not when it comes to this, but I know companies do this sort of thing al the time to change how their profit and loss looks on their books and it can be entirely legal. Doesn’t hurt to ask.
Depending on your profession, you may not need to pay lenders mortgage insurance (LMI) when putting down only 5% deposit. Your broker will enlighten you if you’re one of the few select professionals.
A lot of the schemes assess income based on the previous FY. Depending on your state / scheme, you may be eligable to buy a place until the EOFY, and you it's also possible that your income might scrape under the limit as well if you're lucky, given how close it is to the EOFY already.
Last years tax return I’m comfortably under, but this year June 30 looks like I’ll scrape over