Sunday, June 5, 2011

What to do with house savings?

My wife and I have saved $80 000 to finance our first home. Being new to Australia we are not too sure how we go about using this money for our house. Should we pay the stamp duty out of this sum as well as putting $60 000 against the house value? How much should we keep in our savings to offset any unseen problems?

From: Jason Bourned

Location: Adelaide

1 comment:

Anthony Toop said...

Hi Jason,

Thanks for your enquiry.

I answered your question today on Toop.TV. To view the episode and my live answer, you can watch it at www.toop.tv

However, I'll answer you here as well.

I need to mention that I'm not a financial advisor, but here are my thoughts and suggestions...

Firstly, I would suggest that $80,000 is a good sized deposit and yes I would pay the stamp duty from this money. There are concessions for first home buyers, so make sure that you're up-to-date with all that.

In terms of putting aside some money for safety, I think this is a very sensible idea. You don't need a lot, I would suggest maybe setting 3 months worth of repayments away. This way, you'll have 'time' to think straight should anything go wrong.

Buying property, particularly in the current market, is a really, really smart thing to do because you're buying so much better than if you were buying 12 months ago, especially in the price range you'll be looking at buying in. There's a lot of first home buyers who bought in the 'boom' era, and some of those properties are now available at really great prices.

All in all, now is a great time to buy, I'd suggest keeping that 3 months worth of repayments aside, pay the stamp duty and buy according to your affordability. There's a really big upside for you at the moment, so best of luck with it all!

Thanks,
Anthony