Whiners of the World, Unite!

From "down under", a brave "barefoot" soldier for the Ozzie Herald Sun writes: Perils in easy cash.

WEDDINGS are wonderful things - even better when you're not signing on the bottom line (either at the altar, or at the bar later in the evening).

I recently attended one where I saw first hand the commitment between two young lovebirds - not only the bride and groom mind you, but a couple sitting next to me at the reception.

They had just purchased their first home in inner city Sydney, and you could see the look of envy on the rest of the table of twentysomethings.

The young woman explained that although it needed a little work, their new abode was "a bargain at $1.1 million" - which caused Barefoot to almost choke on his cocktail frankfurt.

That rolled a little too easily off the tongue for my liking, so I suggested that we all say it together - one million, one hundred thousand dollars - and for dramatic effect I emptied the salt shaker and drew the numbers for all to see. Clearly annoyed, she retorted with, "it's only $7000 a month in repayments".

It wasn't until I asked whether they were planning on using the first home buyers' grant to purchase a flower arrangement for their entry hall that I picked up on the daggers I was drawing from my date.

Realising that I had yet again put myself in an awkward social situation, I made a hasty exit to the bar.

To my surprise, the deeply indebted boyfriend followed. After we'd knocked back a schooner or three he confided to me that he was a little worried about taking on so much debt.

My advice was for both of them to score jobs at Macquarie Bank - failing that there was little he could do other than sit back and enjoy the free beer while he could.

You are a brave man, my Barefoot compatriot! You have smitten them right inside the she-wolf's lair.

Over the past month on my regular gig on national youth broadcaster Triple J, I took a listener through the steps that were required to get into her first home - establishing a budget, starting a savings program and paying off credit cards.

A caller rang and said that a real estate agent had advised him that saving for a deposit was a waste of time, given that the value of housing would increase faster than he could save. Herein lay the real problem.

While the regulators have zealously cleaned up the compliance procedures of investment advisors to protect the baby boomers' bounty, nothing has been done to protect first-home buyers, who are making the biggest financial decision of their lives.

Instead of receiving reliable financial advice, first-home buyers are subjected to self-serving pitches from unregulated salesman.

For a taste of this tripe, just go to an auction and listen to the auctioneer tell the crowd the house will not only "double in price'' but that "capital gains are assured".

Next comes the largely unregulated mortgage brokers, who get a kickback for every mortgage they sell - typically via an upfront payment and a trailing commission each year.

Using a mortgage of $400,000, this could translate to $2800 upfront and $1000 a year coming (indirectly) out of your pocket. So long as you pay the mortgage insurance - which protects them in the event of things going pear-shaped, they have every reason to encourage you to borrow more.

The more they can get you to borrow, the more money they make.

Apart from the uptake in low documentation, and no documentation (liar) loans, the slowdown of the housing market has brought increased competition as lenders jostle to win over first-home buyers.

One offer doing the rounds gives recent university graduates the opportunity not only to purchase a home with zero money down, but they'll even throw in a bit extra (debt) to pay off your HECS.

Hex, indeed!

Perhaps it was the booze, but as the night wore on my deeply-indebted mate stopped thinking about his McMansion and started looking at all the things he would be giving up to maintain his million-dollar mortgage - travel, starting his own business, spending time with his family.

This is where I could lend a helping hand. I promised I'd hip and shoulder his princess when the bouquet was thrown - he couldn't afford the ramifications anyway.

Alright! He's going to offer "comfort" to the she-wolf. Nice touch. You're a man after my own heart.