Smashed Avocado by Nicole Haddow

Author:Nicole Haddow
Language: eng
Format: epub
Publisher: Schwartz Publishing Pty. Ltd

Total: $44,912

6. Estimate your monthly mortgage repayments

At the time, we calculated my monthly repayments based on a thirty-year mortgage with interest rates of 5.08 per cent, to allow for possible rate rises. You can use one of the bank’s mortgage calculators and plug in your estimated loan amount and interest.

My estimated monthly repayments came to $1700.

After digesting the digits in that example, I quickly understood that $350,000 was outside my budget at this point. I didn’t have $44,000. So I either had to find something more affordable, use an even smaller deposit with LMI or wait longer.

The upside was that I’d only need the deposit when I agreed to make the purchase at the time I was applying for the loan. I would have to hustle again to find the money for the additional costs at settlement. This is probably not something you could do now; you might need to have all settlement funds available when you apply for the loan. But at the time, if I bought a $300,000 property with a 9 per cent deposit, I needed about $27,000 when I signed the contract and another $9000 when it came time to settle. I would need $36,000 and I had less than $30,000 at this point. So, I knew I needed a long settlement. Ideally ninety days. Working to numbers like this was doable.

After working out my maximum loan – which included the cost of the loan itself, the cost of LMI, stamp duty, legal fees, authority costs (any costs associated with the title) and registration of a caveat, which meant that no one could negotiate on the property while I did – I was ready to present my case to the bank.

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