First Home Buyer - APPROVED

M3Z3JK on 17/11/2021 - 19:30

Hi Guys,

When my partner and I first moved out together (first rental property) I came to the Ozb community for helpful tips general feedback to help us with the expirience.
The feedback I received was so helpful so now seeking some help on buying our first HOME!

Background:
- My partner and I live in Western Sydney
- We have saved enough deposit for an established home and to avoid paying LMI (we are over the threshold for avoiding stamp-duty or FHBG)
- Looking for established home to live in (then rent out after 12months)

Situation:
- Applied through ANZ and things look promising as they have sent us paperwork to e-sign and finalized home-loan.. and sign for an " ANZ breakfree account? "
- They have suggested Fixed rate @ 2.5% for first two years.

Looking for Advice:
- What are common mistakes first home buyers make ?
- should I aim for Fixed or Variable rate ?
- is 2.5% reasonable in current situation?
- Should I try and get an offset account ? (a few have given this advice)
- Does anyone here have expirience with ANZ and/or a Breakfree loan ?

Any other input or advice would be super helpful !!
Thank you in advance.

Financial

Comments

  • SF3 on 17/11/2021 - 19:34
    +3

    Should I try and get an offset account ?

    Offset account to save interest.

  • Soluble on 17/11/2021 - 19:43
    +1

    Congrats, found a house within the budget?

    • M3Z3JK on 17/11/2021 - 20:31

      I went to 5 auctions in the last two weeks and 2/5 were within budget, so I am hopefull we will find a place.
      One thing I've noticed is the amount of bidders at auctions has eased drastocally, from say June/July.

      • Kangal on 17/11/2021 - 21:01
        +1

        You guys must be loaded to be able to say that, during these times, at an auction, in Sydney.
        Nice.

  • Hardlyworkin on 17/11/2021 - 19:46
    +8

    My tip being a few months ahead of you; with the current market, looking for a home is the most soul crushing experience I have encountered (on a 1st world problems basis). Get ready for an emotional rollercoaster. Hopefully you end up on top.

    • M3Z3JK on 17/11/2021 - 20:32

      I'm buckling up for the ride!

    • jdawg7 on 18/11/2021 - 08:05

      Agents are like snakes at the moment watch out

    • tsunamisurfer on 18/11/2021 - 11:55

      Why is it soul crushing?

      Is it hard to find what you want?

      Or the process?

      Or the price?

      • Hardlyworkin on 18/11/2021 - 13:57

        Process and price. Houses are going for well above expectations. Even when adding 20% to any guide. Where I live in SA, blind bidding for a place without really knowing how much above or below others are. Not much satisfaction in securing a place because you've paid a lot more than the next idiot willing to throw a bunch at it too.

  • yellowfever on 17/11/2021 - 19:47
    +1

    If you hardly have any savings after buying home, then no point getting offset.
    Better off getting a fixed rate at 1.98% for 2 years

    If you have some savings and or high income flowing through and don't want to park it in the home loan, the offset is beneficial for a higher home loan interest rate of 2.30% roughly

    If you are looking at fixing at 2.5% you need to shop around as that is a rip off rate

    Common mistake for first time buyers is
    -not shopping around enough
    -borrowing more than you are capable of
    -not doing enough checks on the property
    -buying in Sydney in a Covid environment. The top 2 cities that is overpriced

    • M3Z3JK on 17/11/2021 - 20:33

      We do have a decent income flow and dont want to throw it all into the homeloan. Thanks this is helpful

  • mick123 on 17/11/2021 - 19:49
    • Looking for established home to live in (then rent out after 12months)

    If that is the case, definitely get offset. which means variable.
    Other option is if you really want fixed and if you can get a good enough fixed rate, make it fixed interest only and any savings can go in a separate account. However, your savings will not offset your fixed loan.

    Do not go the redraw path if this could be an IP.

    I have breakfree - no issues so far. ANZ are the slowest in loan approvals though (at least that has been my experience twice in last 18 months)

    • M3Z3JK on 17/11/2021 - 20:35

      is it just me or does the breakfree account seem to have a lot of fees ? account keeping fees monthly, annual fee, extra repayment fees…

      • mick123 on 17/11/2021 - 20:46
        +1

        Should not be ongoing fees if breakfree package except for 395 annual fee

  • ChillBro on 17/11/2021 - 19:53
    +2

    As above, congrats on saving enough deposit to avoid paying LMI!

    • Biggest mistake is buying a shithouse. You need to do your due diligence by getting building/pest inspections and buying the strata report if applicable
    • No one knows for sure what's going to happen to the interest rate so I'd say it's up to you
    • Seems high for a fixed rate, suggest you check out other banks https://www.finder.com.au/the-average-home-loan-interest-rat…
    • Definitely, otherwise redraw is the next best thing
    • Can't help you there
    • M3Z3JK on 17/11/2021 - 20:39

      " Biggest mistake is buying a shithouse " This is actually why we have decided not to go with home&land or newly built homes, I have heard so many horrible stories!
      Thanks for the advice, I will definitely look at building inspections and strata reports.

      • ChillBro on 17/11/2021 - 20:42

        No problem! Wish you all the best in this market. Let us know how you get on.

  • hehehaha on 17/11/2021 - 21:25
    +1

    always settle your homeloan on a variable rate.

    Once things have settled down you can always split the original loan into a fixed and a variable one.

  • Ash-Say on 18/11/2021 - 06:13

    ANZ offers offset on 1 year fixed rate so use that option where possible. That's said, 2.5% is ripp off.

    I just fixed mine at 2.04% 5 months ago. Have they increased their rate when other lenders are decreasing?

    • M3Z3JK on 18/11/2021 - 09:42

      I made a few phone calls and it seems interest rates have gone up in the last 2 weeks…
      You got it at a good time!

  • andrek on 18/11/2021 - 07:13
    +1

    Go through all Terry's tax tips https://www.propertychat.com.au/community/attachments/terryw… and this podcast episode https://www.aussiefirebug.com/terry-waugh-structuring/

    • M3Z3JK on 18/11/2021 - 09:40

      Wow this is like a Tax Bible… thanks so much!

Login or Join to leave a comment
Login Join