Latest / That Home Loan Hub / When Your First Home Isn't Your Forever Home: Lorraine's Story

Transcript

When Your First Home Isn't Your Forever Home: Lorraine's Story · That Home Loan Hub

• 0:10
  SPEAKER_00: Hello and welcome back to that Home Loan Hub.
• 0:12
  SPEAKER_00: Today I am joined by a lovely guest that has been in one of our 100 episodes ago.
• 0:17
  SPEAKER_00: So go back and listen to that if you want.
• 0:19
  SPEAKER_00: But this person has been so kind to me over the last 18 months or more.
• 0:27
  SPEAKER_00: This person has shown me what a true friendship is like.
• 0:32
  SPEAKER_00: So today I'd like to welcome Lorraine Peterson.
• 0:35
  SPEAKER_00: Wow, thank you to the show.
• 0:38
  SPEAKER_00: Sorry, I said Lorraine.
• 0:41
  SPEAKER_00: So that's my new name.
• 0:42
  SPEAKER_00: So Lorraine's nickname is unofficially Lorraine because my five-year-old daughter absolutely adores Lorraine.
• 0:49
  SPEAKER_00: She's like, Lorraine is her idol.
• 0:51
  SPEAKER_00: And she can't say Lorraine, so she calls her Lorraine.
• 0:53
  SPEAKER_00: And that's stuck around.
• 0:54
  SPEAKER_00: Now in um every time we see Lorraine, we just call her Lorraine.
• 0:58
  SPEAKER_00: That's all right.
• 0:59
  SPEAKER_00: Hello, Lorraine.
• 1:00
  SPEAKER_00: Hello.
• 1:00
  SPEAKER_00: Thank you for coming in.
• 1:01
  SPEAKER_00: So today you've got a really interesting story to share with our listeners.
• 1:05
  SPEAKER_00: Um, last year we had you in to share your story as a first-home buyer.
• 1:09
  SPEAKER_00: And this year.
• 1:11
  SPEAKER_01: Uh well, I'll be a second home buyer this year because we sold our property.
• 1:15
  SPEAKER_01: We decided it's time to move on.
• 1:17
  SPEAKER_01: Our kids are starting college, and well, my son's already in college.
• 1:22
  SPEAKER_01: My daughter will be starting soon.
• 1:24
  SPEAKER_01: Decided that it would be a good move to go to Para Para Umus.
• 1:28
  SPEAKER_01: It's closer, they can walk to school.
• 1:30
  SPEAKER_01: I don't have to worry about pickups because I'm getting to the point where I can't do pickups anymore.
• 1:35
  SPEAKER_01: They're old enough to do their own, um, find their own transport.
• 1:39
  SPEAKER_01: Um, so we decided to sell.
• 1:42
  SPEAKER_01: But what we were not expecting is to sell before we had secured another property.
• 1:47
  SPEAKER_01: So we are sitting a little bit in limbo.
• 1:50
  SPEAKER_01: I have um luckily got some connections and have a rental in the meantime.
• 1:56
  SPEAKER_01: But um it's it's a stressful process, lots of loopholes to try and get through to secure property these days, um, especially if there's other offers on it.
• 2:07
  SPEAKER_01: Really hard to get in.
• 2:09
  SPEAKER_01: You've got to be unconditional.
• 2:12
  SPEAKER_01: It's it's a process to try and secure second homes when you're trying to sell your first home.
• 2:18
  SPEAKER_01: I think it's it's quite a different process.
• 2:20
  SPEAKER_00: Okay, so let's break it down a little bit.
• 2:23
  SPEAKER_00: So you decided to sell your first home that you're living in right now to buy the next house that's in a better area.
• 2:30
  SPEAKER_00: And the interesting thing, as well, is that you are doing it in a market that has declined.
• 2:36
  SPEAKER_01: Correct.
• 2:36
  SPEAKER_00: You bought at a higher end over, you know, almost two years ago, and now you're buying um at a lower end, which is fantastic.
• 2:45
  SPEAKER_00: The prices are lower, yeah.
• 2:46
  SPEAKER_00: But then it means you're selling your house at a lower price take as well.
• 2:50
  SPEAKER_00: And you've done some renovations to the house too.
• 2:53
  SPEAKER_01: Yeah, we completely renovated the kitchen, the bathroom.
• 2:56
  SPEAKER_01: Uh, we added on an extra room.
• 2:59
  SPEAKER_01: Um, so we converted the garage into a living space.
• 3:03
  SPEAKER_01: Lovely house.
• 3:05
  SPEAKER_01: Cross lease, maybe that's also a factor.
• 3:08
  SPEAKER_01: People don't really understand the process or what a cross lease is all about.
• 3:12
  SPEAKER_01: There's nothing wrong with cross-leases.
• 3:14
  SPEAKER_01: I think they're great properties.
• 3:16
  SPEAKER_01: Um, it literally just means you're either sharing a driveway or, you know, attached to a house.
• 3:22
  SPEAKER_00: And that's the thing, right?
• 3:23
  SPEAKER_00: Your property, uh, you were a first-term buyer, so it was um priced back at the first-home buyer's range.
• 3:29
  SPEAKER_00: Yeah.
• 3:29
  SPEAKER_00: And the first-home buyers are the ones that are usually a bit more wary of the cross-lease properties.
• 3:34
  SPEAKER_00: Yes.
• 3:34
  SPEAKER_00: And I think that was one of the stumbling blocks for you to be selling your property so fast.
• 3:39
  SPEAKER_00: Yeah.
• 3:40
  SPEAKER_00: And then you were looking at properties that are slightly bigger and therefore the price is a bit higher, and you're sort of back in that low deposit situation.
• 3:50
  SPEAKER_00: It's not like you've made enough from your first home to buy the second house.
• 3:53
  SPEAKER_01: No, no.
• 3:54
  SPEAKER_01: But we were lucky enough to go with a bank that uh offers the 5% deposits or the lower deposits.
• 4:01
  SPEAKER_01: Um, so we did get approval, which was great.
• 4:04
  SPEAKER_01: Um, so it put us in a in a bracket to be able to buy slightly more expensive, but we're still getting for the second property a better.
• 4:15
  SPEAKER_01: We're still going in at a better price because of the market being so low.
• 4:18
  SPEAKER_01: So we're getting a good property at a lower price.
• 4:21
  SPEAKER_01: So it's a it's a lose on the sales side, but it's a win on the buying side for me.
• 4:26
  SPEAKER_00: And that's the thing, right?
• 4:27
  SPEAKER_00: Like you could have waited until the property prices bounce back and you would have sold your house for 100k more.
• 4:32
  SPEAKER_01: Yeah.
• 4:32
  SPEAKER_00: But then you would have been buying.
• 4:34
  SPEAKER_01: For 100K more.
• 4:35
  SPEAKER_01: So it would be sitting in the same position almost.
• 4:37
  SPEAKER_00: Yeah.
• 4:38
  SPEAKER_00: And the other advantage, I guess, for you doing it right now is the interest rate rates are much lower than what they were 18 months ago.
• 4:47
  SPEAKER_00: Exactly.
• 4:47
  SPEAKER_00: So you your repayments, even though the loan is higher, but the repayments might be the same, right?
• 4:53
  SPEAKER_01: Yeah, the repayments are honestly not a huge difference to what we're paying now.
• 4:58
  SPEAKER_01: So maybe 400 more a week, if that much, but for a much bigger property.
• 5:04
  SPEAKER_01: Well, much, much bigger loan.
• 5:06
  SPEAKER_01: Much bigger loan, much bigger property.
• 5:09
  SPEAKER_01: But 400 a week seems like a lot.
• 5:12
  SPEAKER_01: 400 a week seems like a lot, but it's in the long run, it's not.
• 5:16
  SPEAKER_00: And that's the thing, right?
• 5:17
  SPEAKER_00: Like the sacrifices, what are you prepared to make?
• 5:20
  SPEAKER_00: But then you're getting a bigger house, and then it means more bedrooms.
• 5:23
  SPEAKER_00: It means if you want to get a borderer, exactly, um, you know, exchange student.
• 5:27
  SPEAKER_01: That's what we're gonna do.
• 5:28
  SPEAKER_00: Exactly.
• 5:29
  SPEAKER_00: You know, it opens up income.
• 5:30
  SPEAKER_00: Yeah, opens up opportunities, right?
• 5:32
  SPEAKER_00: Exactly.
• 5:33
  SPEAKER_00: Yeah, you no longer need to sleep in the garage.
• 5:35
  SPEAKER_00: There we go.
• 5:36
  SPEAKER_00: I can move out of the garage.
• 5:39
  SPEAKER_00: And um, let's talk a little bit about your journey as um, you know, how to put an offer.
• 5:45
  SPEAKER_00: Because that's a lot of the time people ask us, you know, how to put an offer when you're buying and selling.
• 5:51
  SPEAKER_00: What sort of conditions were you told to use, for instance?
• 5:55
  SPEAKER_01: Well, the one is always finance, even if you have approval with a bank, finance is really important.
• 6:01
  SPEAKER_01: Don't let out just find real estate agents that like to get you to have no conditions, but um, it's there's still a lot of factors, like for example, our house that we are interested in still needs the certificate of completion because it was completely renovated.
• 6:17
  SPEAKER_01: So we're waiting for that.
• 6:18
  SPEAKER_01: So that is still a condition that you need, even though you would be deemed as a clean offer because you've got approval and you've got all that in place, you still need one or two things.
• 6:28
  SPEAKER_01: So it's important to look out for.
• 6:30
  SPEAKER_01: Finance will be your biggest one, always important.
• 6:33
  SPEAKER_01: Um, and then builders' reports and things like that, limb reports, unless the it's already provided, but it's always good to do your own due diligence and get your own builders.
• 6:45
  SPEAKER_01: Um, the banks don't normally request it unless they are specifically asked for it, but yes.
• 6:50
  SPEAKER_00: And I know you were quite guttered with this house that you bought last year, that the first um rainstorm, you discovered a massive puddle in your backyard.
• 7:00
  SPEAKER_01: Yeah.
• 7:00
  SPEAKER_01: Front yard actually, ponding.
• 7:03
  SPEAKER_01: I don't have a backyard now.
• 7:05
  SPEAKER_00: Yeah.
• 7:06
  SPEAKER_00: And um, you had to invest a lot into the drainage.
• 7:09
  SPEAKER_01: Yeah, we did a lot of hard work there with getting drainage.
• 7:13
  SPEAKER_01: So now if it rains, if there's a lot of rain, it's just purely a little puddle now compared to almost a whole pond.
• 7:22
  SPEAKER_00: Exactly.
• 7:23
  SPEAKER_01: So yeah, we leveled the ground and uh put draining chips and all that in.
• 7:27
  SPEAKER_00: I'm sure uh you had some ducks at some point just hanging out in probably backyard.
• 7:32
  unknown: Swimming.
• 7:33
  SPEAKER_00: Send my dog to chase them swimming in a pond.
• 7:36
  SPEAKER_00: It's it's definitely a stressful experience when you're trying to sell your home and buy next one.
• 7:41
  SPEAKER_00: I remember we had to go through that as well when we were moving from Palms to North to Parapur Umu 10 years ago, and we were in the same boat.
• 7:49
  SPEAKER_00: We had to sell our home in order to secure one here.
• 7:52
  SPEAKER_00: And um, you know, of course, there are uh products available like bridge loans that everybody loves, open bridge and closed bridge.
• 8:02
  SPEAKER_00: And um, you know, there could be a solution for some, but in a lot of cases the bank may not like it because if you don't have enough equity, you know, they don't like bridge situations at all.
• 8:13
  SPEAKER_00: So um, so yeah, it just leaves you with no choice.
• 8:15
  SPEAKER_00: One of the other conditions I would uh I usually recommend to my clients is as you say, find a house first before you sell yours.
• 8:23
  SPEAKER_00: So you could actually protect yourself by putting a condition for you to find something.
• 8:28
  SPEAKER_01: Yeah.
• 8:28
  SPEAKER_00: So even if the buyer goes unconditional on yours, you as a seller still have the final say.
• 8:35
  SPEAKER_01: Yes.
• 8:35
  SPEAKER_00: And that enables you to achieve two things.
• 8:38
  SPEAKER_00: It's a you know, you have a chicken and an egg because you suddenly have the unconditional offer on yours, meaning that's it, those people are gonna buy, but then you can go and find something for you.
• 8:50
  SPEAKER_01: Yeah, and that's a good tip.
• 8:52
  SPEAKER_01: Yeah.
• 8:52
  SPEAKER_00: Yeah.
• 8:53
  SPEAKER_00: Um, should have come to see me, you know.
• 8:55
  SPEAKER_00: Damn.
• 8:57
  SPEAKER_00: But um, that prevents you from suddenly selling your home and going, oh my goodness, where am I gonna go?
• 9:03
  SPEAKER_00: Where am I gonna go move to?
• 9:05
  SPEAKER_00: Because I haven't found the house yet that I want to move into.
• 9:07
  SPEAKER_00: Yeah.
• 9:08
  SPEAKER_00: The other thing I also suggest to clients is always negotiate with the vendor, uh, sorry, with this buyer, whether they will let you rent the house back from them.
• 9:18
  SPEAKER_00: Yeah.
• 9:18
  SPEAKER_00: You know, it saves you moving twice because sometimes people go, well, I'll have to go and rent out somewhere and then buy again.
• 9:25
  SPEAKER_00: You might as well stay in your own home.
• 9:27
  SPEAKER_00: Like if they're not a first-home buyer and if they're buying it as an investment property, it might just tie them over until they decide what they want to do with that property, whether they want to tidy up, whether you know, put it back on the market, etc.
• 9:40
  SPEAKER_00: But meanwhile, you could rent it back from them.
• 9:43
  SPEAKER_01: That's a very good tip.
• 9:44
  SPEAKER_01: Um, yeah, we are in a position, luckily, that we have a little rental for the next month if we don't get into the other property in time.
• 9:54
  SPEAKER_01: But the other property is also empty.
• 9:56
  SPEAKER_01: So it's to our advantage for us.
• 9:59
  SPEAKER_01: In this case, we can move in before we settle.
• 10:02
  SPEAKER_00: Yeah.
• 10:03
  SPEAKER_00: And that's another one as well, right?
• 10:04
  SPEAKER_00: You could move into the new one you're buying and rent it out until you're ready to to settle, yeah.
• 10:10
  SPEAKER_01: So there's there's always options and there's always solutions to every problem.
• 10:16
  SPEAKER_01: To every problem.
• 10:17
  SPEAKER_01: The problem with that we had is that we had a property we were interested in, put in an office, try to sell ours, and then we got cashed out.
• 10:25
  SPEAKER_01: And then we got stuck with then we got an offer on our house that we couldn't say no to, but we didn't have another house that we had secured yet.
• 10:34
  SPEAKER_01: So that that was our problem.
• 10:36
  SPEAKER_00: Yeah.
• 10:37
  SPEAKER_01: And that's where we are at now.
• 10:39
  SPEAKER_00: But you know, I always uh think that everything happens for a reason.
• 10:42
  SPEAKER_00: There's blessings in disguise, right?
• 10:44
  SPEAKER_00: At that point, it doesn't feel like a blessing.
• 10:46
  SPEAKER_00: But then in a year's time you look back and be like, thank God I didn't buy that house.
• 10:50
  SPEAKER_00: Yes.
• 10:51
  SPEAKER_00: And thank God we bought this house.
• 10:52
  SPEAKER_01: Exactly.
• 10:53
  SPEAKER_01: There's a reason why these things are happening, and it's uh you just grow from them, and then it just makes me learn more every time I go through the process, and I'm like, okay, well, I've just learned something today that I didn't know before.
• 11:05
  SPEAKER_00: So it's good.
• 11:06
  SPEAKER_00: I'm a firm believer that you know things do happen for a reason and what's meant to be yours will be yours.
• 11:12
  SPEAKER_00: Exactly.
• 11:12
  SPEAKER_00: And you know, some properties actually do come back to clients, like you know, they might have missed out the first time.
• 11:18
  SPEAKER_00: Yeah, and then somehow, by some crazy miracle, uh, the property is still available two months later.
• 11:24
  SPEAKER_00: Exactly.
• 11:25
  SPEAKER_00: And they get a chance to apply for it again.
• 11:27
  SPEAKER_00: Yeah.
• 11:27
  SPEAKER_01: So this property we looked at a while back, but I thought it was not really in my league.
• 11:33
  SPEAKER_01: And then um, we hadn't sold yet either, and I didn't want to get cashed out again, so we just waited and then it just happened that it was still there, and we decided to give it a go.
• 11:45
  SPEAKER_00: Wow, that's awesome.
• 11:46
  SPEAKER_00: Lorraine, thank you so much for sharing your story today.
• 11:48
  SPEAKER_00: Is there anything else you want to add as a tip for people that might be in a similar position to you?
• 11:54
  SPEAKER_01: Just don't give up.
• 11:55
  SPEAKER_01: There is a property out there for you, there's always a way to get around it.
• 12:00
  SPEAKER_01: Um, you will not be on the street.
• 12:02
  SPEAKER_01: There is, like you said, to put stuff in your contract that will protect you so you can maybe still stay in your rental until you've uh into your home, until you find your new home, things like that.
• 12:13
  SPEAKER_01: So there's always a solution.
• 12:15
  SPEAKER_01: So don't give up.
• 12:16
  SPEAKER_00: It will work out.
• 12:18
  SPEAKER_00: It will it will work out.
• 12:19
  SPEAKER_00: And I know you're looking at me because you're like Sabu have a big yard, you know, if anything will come and tent out at your house.
• 12:25
  SPEAKER_00: Yep.
• 12:26
  SPEAKER_00: Well, maybe we'll be doing that.
• 12:28
  SPEAKER_00: No, that's awesome.
• 12:29
  SPEAKER_00: Lorraine, thank you so much.
• 12:30
  SPEAKER_00: And I think just a message again back to those that are looking to buy the first home.
• 12:35
  SPEAKER_00: Your first home is not your forever home.
• 12:37
  SPEAKER_01: No.
• 12:37
  SPEAKER_00: Lorraine, you had to do what you had to do to get onto the ladder.
• 12:41
  SPEAKER_01: Yes.
• 12:42
  SPEAKER_00: Do you regret it?
• 12:44
  SPEAKER_01: Not at all.
• 12:45
  SPEAKER_01: I think if I hadn't done it then, um, no, I think it would have been more difficult for me to get onto the property ladder now.
• 12:52
  SPEAKER_01: I just felt it was the right time.
• 12:54
  SPEAKER_00: Imagine like the last you know, two years you've been paying your own mortgage, right?
• 12:59
  SPEAKER_00: Instead of dead money of rent to someone else.
• 13:04
  SPEAKER_00: Yeah.
• 13:04
  SPEAKER_00: And what you would have noticed as well is that expenses always happen, right?
• 13:09
  SPEAKER_00: You need a new car, the dog needs a vet bill, etc.
• 13:12
  SPEAKER_00: etc.
• 13:13
  SPEAKER_00: So people that have savings, often savings tend to dilute themselves.
• 13:17
  SPEAKER_01: Yes.
• 13:17
  SPEAKER_00: Because you always have to pay bills.
• 13:19
  SPEAKER_01: That's exactly it.
• 13:20
  SPEAKER_01: And I think if we had waited, our deposit would have just got it depleted.
• 13:24
  SPEAKER_01: Shrunk.
• 13:25
  SPEAKER_01: Yeah.
• 13:26
  SPEAKER_01: And then we would be in a position where we have nothing.
• 13:28
  SPEAKER_01: At least I had a home that we could sell.
• 13:31
  SPEAKER_01: So we even though our deposit wasn't big, it was still something, and we can go forward.
• 13:36
  SPEAKER_01: Yeah, record some money back.
• 13:38
  SPEAKER_00: Exactly.
• 13:38
  SPEAKER_00: Now awesome, guys.
• 13:39
  SPEAKER_00: Thank you so much for tuning in, and we hope to catch you again.
• 13:43
  SPEAKER_00: Thank you, Lorraine.
• 13:44
  SPEAKER_00: Pleasure.
• 13:45
  SPEAKER_00: Bye.
• 13:45
  SPEAKER_00: Bye.