First Home Buyers
Buying your first property is exciting if not a little daunting. There are two roads you can go down. You can buy an existing property or a new property. If you are a first home buyer in the second category, you maybe eligible for a grant from the state you are buying in. Please check the websites linked below. You may also check for stamp duty concessions.
NSW – First Home Owner Grant (FHOG)
Victoria – First Home Owner Grant (FHOG)
Queensland – The Great Start Grant
Western Australia – First Home Owner Grant (FHOG) and/ or First Home Owner Rate of Duty
South Australia – First Home Owner Grant (FHOG)
Tasmania – First Home Owner Grant (FHOG)
Northern Territory – First Home Owners Grant and First Home Owners Discount
First Home Loan Deposit Scheme (FHLDS)
Sometimes saving up is hard to do. You have rental payments coming out of your pay along with the other costs of living. Australian property prices have gone from strength to strength and our population is forever on the increase. The federal government recognises this. If you are an Australian citizen (permanent residents are not included in this category), you may be eligible for the FHLDS. This essentially means that if you have a deposit of 5%, the government will guarantee your first home buyers loan. You can think of it as not having to pay the lenders mortgage insurance (LMI), which can be rather costly sometimes.
Need Help With A New Property?
We have the connections you’ll need
If you need assistance in finding a brand-new property, Pegasus Wealth works with other businesses that can assist with finding you the right one and we will do all the paperwork to get the grant. Please note that the grant may not necessarily be given up front depending on what you want to do, so speak to us about it first. Pegasus Wealth prides itself on its selection criteria for property. We encourage you to buy with these criteria in mind so that if this is your stepping stone for a future upgrade, you are able to see capital growth for a larger deposit or you are able to keep it for investment purposes.
If you can come up with the deposit and costs (20% of the purchase price +government costs + lawyer fees) – either through savings, a gift, superannuation or using equity in your parents property with them being your guarantor (but not needing their funds), then there will be no Lenders Mortgage Insurance (LMI). This is the insurance that you take out for the lenders benefit should you not be able to make loan repayments.
Need Help With Your Options?
We have the information you’ll need
There are options for those who have no savings, no superannuation or no equity from parents to rely on, but you need to consult with us first. There are pros and cons that you need to consider.
Pros
A definite positive is getting into the market now with certainty of the price you are paying. Some people save and wait, but sometimes this can go against the person in a rising market as they continually have to save and every time they attempt to buy something, they find that they simply do not have enough.
Cons
If you are unemployed and you are eligible for government assistance, the government will pay for your rent, but they are not up for paying mortgage payments. If there are any chances you are uncertain about your job situation, we have solutions, but you have to be willing to go along with our recommendations and implement plan B, if it has become necessary.
Other considerations
These include the comparison of your rental payments vs loan repayments. Also, consider the state of the economy. Property prices rise over time unless you can cull the population and you haven’t followed my criteria. Sometimes people get pushed out of the locations they want simply because they have waited too long.
Regarding using a deposit from your superannuation, the government has instituted the First Home Super Saver (FHSS) scheme, which has allowed first home buyers to have access to the FHSS portion of your superannuation. Don’t get too excited, the maximum that you can contribute under the FHSS is $30,000, with the maximum contribution being $15,000pa (two years worth of savings). All contributions that you make must be voluntary ie. Salary sacrifice or a tax deductible super contribution. None of it is from the compulsory superannuation guarantee paid by your employer. This is only to assist in you saving tax as the voluntary contribution is taxed at 15%, not your normal tax rate.
For first home buyers, please be prepared to fill out a budget expenditure sheet. It is imperative that you know what your priorities and expenses are. If you are serious about getting your foot on the property ladder, give us a call today.
