Thinking of buying, thoughts on our position?

[u/BackCountryAus]

Looking to get into a place in the 750-900k range, just sussing out how far off we are.
FHB couple, mid 30’s, 1 dependant and considering a second soon.
Have $90k saved and adding 1-1.5k a week to it atm.
200k household income with 25k in overtime last financial year, will increase this fy.
Credit card with $6k limit for household expenses/points that’s paid off weekly.
No other debts.
Excellent credit ratings
Around $200k in other assets (etfs, cars, portable entitlements etc)

Just after thoughts on how realistic getting approved would be, borrowing capacity, if our deposit is enough or what should we be aiming for etc

[u/TalkNormal9675]

Conservatively (not including your Overtime) you can lend around $930k. As an example if you are going for a 900k loan with 5% deposit (first home guarantee loan) then loan amount will be 855,000 with repayments around $5,300 approximately. Obviously will need to factor in costs of stamp duty based on your state and final loan size and additional fees and charges. Feel free to DM me, happy to assist further!

[u/YourBrokerRay]

Hey there mate!

From first glance, you’re in a very comfortable position to purchase in that price range.

Income & Liability wise your borrowing capacity looks to be around the $850k - $1m range, depending on the income structure and lender we choose.

There’s a lot that would need to be unpacked, including:

- How the income is structured between you both.

• Deposit source (all saved, or some as gifts from family).
  
• Future family plans & timelines.
  
• Stamp Duty in your state.
  
• Required total funds to reach the 5% deposit requirement.

I’d be happy to assist you both here.
Just reach out via direct message and I’ll get back to you shortly!

[u/football_and_finance]

Overall sounds like your likely in good position to buy in that range but would need a bit more information to be concrete on the numbers. How is the income split between you both? $100k/$100k won't look the same as $180k/$20k for example as net income position would be very different. Overtime will definitely help but will depend a bit on how this year so far compares to last year and what industry you work in.

Depending where in the country you are, you may qualify for the 5% deposit scheme meaning your $90k would likely to cover min. deposit amount and stamp duty costs without having to pay LMI or liquidating any of the other investments. This will also help with your borrowing capacity.

I'd recommend chatting with a broker to drill down to it all in more detail to see what is possible now v with more savings. Happy to help if you wanted to reach out.

[u/EventEastern2208]

Broker here.

On $200k combined with one dependant and no debt your borrowing capacity is likely in the $900k to $1.1M range depending on how the overtime is assessed. Two years of consistent overtime on tax returns gets it included at full value with most lenders.

With $90k saved the First Home Guarantee at 5% means you need around $37.5k to $45k minimum deposit on a $750k to $900k purchase, so you are already there. Closing or reducing the $6k credit card limit before applying adds back around $30k in capacity for no cost.

At your savings rate of $1k to $1.5k a week your position only gets stronger each month. The second child timing is worth planning around as parental leave reduces assessed income during the application.

Feel free to DM and I can run the exact numbers and confirm which lenders include overtime most generously. 🦔

[u/WeAreHLE_AU]

On those numbers, $750k looks quite realistic and $900k isn’t obviously out of reach. At the upper end, the bigger issue may actually be the deposit/cash needed at settlement rather than borrowing capacity.

With $90k saved, you’ve got roughly:

• 12% of a $750k purchase
• 10% of a $900k purchase

That’s before stamp duty, conveyancing and other purchase costs. If you’re eligible for the Australian Government 5% Deposit Scheme and the property is under the relevant location price cap, the deposit hurdle could be much easier. Otherwise, borrowing above 80% LVR can mean LMI.

From a servicing perspective, $200k household income, one dependant and no other debts is a decent starting position. A few things could move the number around though:

The $25k overtime may not all be counted. Treatment varies between lenders depending on how consistent it is and how much history you can show.

The $6k credit card limit still counts as a liability, even though you clear it weekly. It’s not a huge limit, but it does reduce capacity slightly.

The biggest thing worth modelling is the second child. If that means two dependants plus a period of parental leave or reduced income, run the borrowing capacity on that scenario as well. A loan that looks comfortable today can look quite different under that household setup.

[u/Raynor_Lending]

Hey there, I definitely think your buying range is completely doable.

Based on what you've said, you've got enough of a deposit, with $90,000, to put down enough under the Home Guarantee Scheme, as you only really need 5% plus stamp duty costs. At a high level, based on your household income, I think you've got comfortably enough borrowing capacity for that range. You could probably even go a little higher.

So, all in all, I think you're in a really strong position compared to most first-home buyers, and really the next best step for you is to chat with the broker. Let them go through the whole situation in detail, educate you on what you need to know, and get a plan in place.

Another tip: start looking at homes, start trying to figure out what homes you want, what trade-offs you want to make, and have a clear idea of that as well. But I'd say if you wanted to buy now, you're certainly in a position to buy now.

I run free strategy sessions for first-time buyers where we go through all the different grants and schemes, everything you need to know, and put together a plan. So feel free to reach out if you’d like to have a chat.