thanks guys for your comments. zetta, your suggestions are very wise, and don't you worry i have looked into those! it is my intention to purchase a house within the next 12-24 months. while i would like to completely pay off my car loan by then, i know i can roll the remaining debt into the mortgage if need be. property around the area i would like to buy ranges from $280,000 up to $500,000 (for a regular 3 bedroom home). unlike some people i am am lucky enough to have a partner who is also intent on owning his own house, as well as his dad who is willing to help financially with renovations with the goal of selling the first home within 1-2 years and using the profits to buy another home.
of course i don't intend to slacken off in my savings efforts just because i am safe in the assumption that a house deposit is already being looked after. i would love to be able to contribute the same amount, so perhaps we could even go for a bigger, better home! I would say that my goal here for a house deposit at the moment is somewhere in the vicinity of $5000-$8000. with that of course is my partners conribution of roughly the same amount, as well as his dads. so we could be looking at a nice amount there.
anyway. on to some more good news, a no spend day today! what's even better is that it's pay day tomorrow and i have... $309.01 in my bank account. ($196.01 available, $113 clearing.) i believe my bank fee was deducted today ($4.00) and i earnt a whopping 1c interest.
houses, no spend
March 1st, 2007 at 09:02 am
March 1st, 2007 at 03:24 pm 1172762666
Look at 80-15-5 programs. 80% first, 15% second, 5% down.
5% of $280,000 is $14,000 for the down payment.
If you want cash out, my advice is "plan" for the $14,000 down payment, then use any additional funds to pay off debt going in. I would not take out a mortgage on first house with intention of cash out. Many reasons (see below)
The bank will calculate a front end ratio (income/house payment) and a back end (total debt/income).
Front end at 30% and back end at 40% will be GREAT numbers (we were 35 and 41, I think).
If you are planning on buying, then start to watch interest rates. 6%-5.875% are what is common "today". I am refinancing and locked in 5.875%, the next week rates were 6% or more.
If loan is less than 80% LTV (loan to value, meaning you did not put 20% down), then you will probably NOT get the rate I just listed. It will be .125%-.25% higher.
If your ratios are tight, every dollar will matter. Get debt paid off. If things are good and rates are high, get in the house, fix it, then refinance. Take the cash out of the refinance so you have the house already and the financial picture was fundamentally sound going in.
March 1st, 2007 at 08:18 pm 1172780320