A young Australian woman is warning first-time homebuyers that her HECS student debt almost cost her the chance to buy her dream apartment.
Kristie McConnell, 26, has spoken about the humiliating experience she faced when trying to buy a one-bedroom apartment in Southport, Queensland, for $365,000 in February.
McConnell, who earns $80,000 a year, had been saving when he was 21 to get into the real estate market.
With no experience buying property, Ms McConnell sought advice from a broker and a solicitor.
The 26-year-old explained that she was honest when she said she owed $60,000 in debt to HEC for her degree in international business and finance.
The broker initially told Ms McConnell she needed a deposit of $27,000 for the unit, but this increased to $38,000 after taking into account her HECS student debt.
Kristie McConnell (pictured) warns first-time home buyers that HEC debt almost cost you the chance to buy your dream apartment.
But when he went to sign the contract, the bank unexpectedly asked him for a deposit of $48,000.
“He (the broker) went to the actual bank and got his confirmation the day I signed the contract, basically saying, oh, uh, the bank won’t give you that much,” he told News.com.au.
Ms. McConnell was told this was due to the apartment complex’s $70-a-week corporate fees and her student debt.
Fortunately, his parents provided him with the necessary funds to cover the shortfall needed to purchase the apartment.
The ordeal left McConnell feeling disillusioned with the challenges young Australians face trying to get ahead.
“You do all the right things: you go to college, you get a good job, you get property, but you’re still on the defensive,” he said. ‘We immediately start our adult lives in debt, and then there’s the cost of living and rent prices.
‘Young people waste money on rent because they can’t afford to get into the property market. “I would love for someone from an older generation to tell me what I could have done better.”
McConnell criticized her broker and attorney for blindsiding her during the home-buying process.
His final deposit totaled $53,000, which included agent and attorney fees and a “hidden” title transfer fee.
She said she was not told about a $2,000 title transfer fee, despite asking her several times about the additional costs.
‘I have a broker who deals with the bank for me. “I have a lawyer who does all the legal stuff for me,” she said in a video posted on social media.
“I’m trying to do the right thing and ask all the questions and be as prepared as possible and I feel like every step of the way someone turns around and kicks me.”
‘Suddenly I didn’t have enough money to buy this apartment that I signed a contract saying I’m going to buy because there are additional fees that no one told me about.
‘I feel like an idiot every time something else comes up because I’m so lost right now. I feel like a little kid playing an adult game.’
McConnell added that she was very “lucky” to have a supportive partner who was willing to help her and gave her extra money to buy the apartment.
Ms McConnell was initially told her deposit would be $27,000, but it was increased due to her HECS debt. Her final deposit total came to $53,000, which included attorney and broker fees and a “hidden” title transfer fee that she knew nothing about.
Ms McConnell said she “felt like a child playing an adult game” after receiving fees despite asking her broker and lawyer about the additional costs.
McConnell warned other first-home buyers to “be careful” as the process was “without a doubt the worst experience” of their lives.
Social media users sympathized with the frustrated Australian, with many claiming they had a similar experience when buying their first property.
“I also just bought an apartment and was told I would need an additional $12k ($91k!) ONE HOUR before my financial approval expired,” one person wrote.
‘I reached an agreement and they applied a special tax of $61,000 that expired in 13 days. The lien was removed after I had signed the contract and I was never notified until after the agreement,” another commented.
‘I’m having exactly this problem right now too. “It’s very difficult to get a straight answer on how much my deposit should be,” chimed in a third.
A fourth added: “I had enough for my deposit and stamp duty but not enough for the million other expenses no one tells you about.”
“It was the most financially stressful three months after buying a house.”