You are a financial advisor at ABC consulting. You are responsible to answer questions from your...

  

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You are a financial advisor at ABC consulting. You are responsible to answer questions from your customer Peter who is planning to buy a house in metropolitan Melbourne. Peter has been working for several years as a chef in a restaurant. His after-tax salary is $7,500 per month. He has currently accumulated $150,000 in his account. a) Peter would like to have a rough idea on the cost of buying a house as a first- home buyer. You need to investigate the following costs or concession applied in Victoria, Stamp duty; First home buyer duty exemption and concession; First home buyer owner grant. Google research these costs, make proper assumptions and give Peter a guide on those costs. [5 marks] b) Now Peter is living in a rented house, he is planning to buy a newly built house at Point Cook (VIC 3030) with a market price $586,000. Suppose he is eligible to borrow a maximum 80% of the market price from a bank. That is, when the house is settled, he needs to use his savings to pay the house developer a lump-sum amount of the cost mentioned in a), and at least 20% of the market price. The remaining part can be paid by borrowing from the bank. Thereafter, Peter moves into the house and needs to repay the mortgage. Suppose the borrowing rate is 3.0% per annum effectively and always use 30 years as the loan duration. Using your cost guide in a) and assuming no other costs, making proper assumptions on Peter's minimum monthly living expenses, has Peter accumulated enough money for this purchase right now? If yes, how much he needs to borrow from a bank to buy the house? Make a repayment schedule for Peter in an excel spreadsheet. If no, how much he needs to accumulate more and how long it takes using 1.5% per annum effectively for the depositing? Hints: Two conditions need to be satisfied to buy the house by now: The current saving should be greater than or equal to the sum of purchasing cost and 20% of the house price; Peter's monthly salary should be enough to cover his living expenses and the monthly repayment. [9 marks] You are a financial advisor at ABC consulting. You are responsible to answer questions from your customer Peter who is planning to buy a house in metropolitan Melbourne. Peter has been working for several years as a chef in a restaurant. His after-tax salary is $7,500 per month. He has currently accumulated $150,000 in his account. a) Peter would like to have a rough idea on the cost of buying a house as a first- home buyer. You need to investigate the following costs or concession applied in Victoria, Stamp duty; First home buyer duty exemption and concession; First home buyer owner grant. Google research these costs, make proper assumptions and give Peter a guide on those costs. [5 marks] b) Now Peter is living in a rented house, he is planning to buy a newly built house at Point Cook (VIC 3030) with a market price $586,000. Suppose he is eligible to borrow a maximum 80% of the market price from a bank. That is, when the house is settled, he needs to use his savings to pay the house developer a lump-sum amount of the cost mentioned in a), and at least 20% of the market price. The remaining part can be paid by borrowing from the bank. Thereafter, Peter moves into the house and needs to repay the mortgage. Suppose the borrowing rate is 3.0% per annum effectively and always use 30 years as the loan duration. Using your cost guide in a) and assuming no other costs, making proper assumptions on Peter's minimum monthly living expenses, has Peter accumulated enough money for this purchase right now? If yes, how much he needs to borrow from a bank to buy the house? Make a repayment schedule for Peter in an excel spreadsheet. If no, how much he needs to accumulate more and how long it takes using 1.5% per annum effectively for the depositing? Hints: Two conditions need to be satisfied to buy the house by now: The current saving should be greater than or equal to the sum of purchasing cost and 20% of the house price; Peter's monthly salary should be enough to cover his living expenses and the monthly repayment. [9 marks]

Answer rating: 100% (QA)

a Since Mr Peter is looking to buy a house in Victoria and as per the available laws the answers to ... View the full answer