Exercise physiologist and personal trainer Emma Pennisi spent six to 12 months scouring the Northern Rivers before buying a house in her native Ballina in 2018. At the time, she was 21, had just finished studying and was working full-time. Pennisi didn’t know then that the town would be inundated by floods a few years later.
The business owner shares some insights from her home purchasing journey.
Emma Pennisi spent months scouring the Northern Rivers before buying a house in her native Ballina in 2018. Photo: Pauline Morrisey
I was surprised by how much the bank scrutinises your spending when you apply for a loan. It doesn’t matter if you have the deposit ready and can show you’ve been paying an amount of rent that can service the loan; they want to know exactly how you spend money in other areas of your life. I had to show them three years’ worth of statements.
It’s a great idea to start paying attention to your spending long before you apply for a loan. You need to consider what the bank would think anytime you’re going out for dinner or spending money in ways that the bank could deem unnecessary. Before I applied for a loan, I made sure that I had consistent patterns in spending. If I spent $50 on something one week, I made sure I didn’t spend more than $50 on it the next week. The thing is that if your loan gets denied, it makes it harder to re-apply or get a loan with another bank.
I had no idea “gazumping” was a thing — until it happened to me. I fell in love with a house and made an offer on it, which the seller accepted. But when I called them the following day to talk about the next steps, the agent said, “Sorry, someone else has made us a better offer.” You can sign a contract, but nothing is official until you actually exchange contracts. That was a learning experience in holding off on celebrating your new home until you’ve got the keys in your hand.
Purchasing your first home can be an overwhelming experience, and there aren’t many resources to help you. At first, I had no idea what questions I should be asking the real estate agents or that I needed to engage a solicitor or conveyancer. But once I found a house I wanted to buy and enlisted the help of a conveyancer, everything became clearer.
My conveyancer was great; he talked me through the whole process and the grants available to me. He explained the different pricing thresholds when it comes to the first-home buyer’s grant, how long you need to live in the house in order to qualify, and how to apply. Finding a good conveyancer that you can trust – ideally, someone who comes recommended – is a huge help.
When I bought my house four years ago, people weren’t talking about Ballina flooding, so the question of whether I was buying in a flood zone didn’t even enter my mind.
It turns out my house, having been constructed recently, was built to a 1 in 1000-year flood level, so it didn’t flood at all when the floods hit the Northern Rivers earlier this year. The house behind mine was built decades ago, to the old flood levels, and it went completely under. I was extremely lucky.
Still, living in a flood-prone area means that my insurance for flood has jumped from about $2400 per year to $10,000 per year. I called the insurance broker to check that they were aware that the house hadn’t flooded, and he explained that the insurance company basically just draws a circle on the map and says, “That’s a flood zone.” Regardless of what specs you build your house to, you come under the same rates as everyone else in that zone.
As a home owner, you need to factor in all those little costs that you don’t have to pay as a renter – such as council rates, insurance and maintenance – on top of your mortgage payments. Home maintenance requires a decent investment of time as well.
Interest rates were super low when I bought my house, and my parents warned me they’d probably never be that low again. They also suggested I pay larger amounts than required for my mortgage repayments so that the funds would go into an overdraft, which I’ve done. Doing this has meant that I haven’t noticed the interest rate changes. Plus, if something goes wrong, or there’s a month where I’m not earning money, it’s not a big stress because I’m ahead and I have a buffer.