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.

https://nhfic.gov.au/what-we-do/fhlds/eligibility/

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.

Want to know more? contact us now

Why not build new

Life is grand when you can have the house of your dreams! Choosing the style, specifications and making your vision a reality. It’s yours, you created it and its time for someone to make your dream come true.

There are two contracts to sign. The Contract of Sale is for the block of land that you purchase. The second contract is a Building Contract where you also have to sign off on the Building Specifications. This is the exciting part where we choose whether or not we want Miele, SMEG or Gaggenau (Bosch) kitchen appliances, marble or granite table tops, plus a plethora of choices, which can be time consuming, but at the same time can be a pleasurable experience.

The loan tends to be done on the basis of both with the Contract of Sale and Building Contract, with the Contract of Sale or land portion settling first before the build begins. The construction then has various stages where each stage is paid:

Let your wealth grow with you.

This is our specialty. We have extensive experience with this. Getting to be financially free on a six figure passive income is what we aim for and if you have any questions along the way, we can hold your hand along the way.

We recommend that you have one property already, whether it is an owner occupier home or another investment property that is fine. We will need to undertake a valuation of that property. If there is enough equity to draw on, this will be used as the deposit and costs.

The main loan will then be against the new investment property. This will be up to 90% Lending to Valuation including any Lenders Mortgage Insurance.

If you are new to this, we are happy to provide guidance along the way. We are most likely to have been there done that ourselves and have had to indulge in all sorts of property strategies.

We also assist you in setting goals and there are certain milestones to hit.

This is the stuff that can help you pay your home loan off faster, minimise your taxes whilst getting someone else to pay off your mortgage so that you can reap the benefits down the track. We will show you how and stalk you along the way to make sure you are maximising the benefit of having an investment property.

At some point you may have to pay taxes when rental income surpasses the loan repayments, depreciation and other costs of carry.

More than just a mortgage.

Getting a home loan health check is important. You want the best structure, strategy and interest rate to pay down your debt as soon as possible. If this is your owner-occupier home debt, there is no point in you having it. There is no benefit to you in having this debt, so pay it down as fast as possible!

We encourage people to get a monthly statement for their loans. This way you can keep track that your payments are being made on time as well as your interest rate. You may find that over time, lenders will to raise your interest rates. Any excuse will do. If the Reserve Bank of Australia were to raise rates, lenders will do the same. The Royal Commission introduced recommendations and to implement these interest rates were raised as they now have to pay their staff for working more hours to ensure compliance of the loans coming through. Finance Brokers are there to keep the lenders honest, otherwise, their profit is driven by the amount of interest you are paying to them. Many clients have found that lenders are not willing to reduce or match an interest rate they have found until we have gotten involved.

Lenders do want your business though and in saying that, they may have different incentives in place especially in the form of a refinance rebate. Rates are still low today. To see if you can keep more of your money in your pocket, call us now. Better in yours than theirs.

When you want to get ahead.

When a residential property is being used as security for a loan, it becomes a lot cheaper. People often have a lot of un-beneficial debt that has a high interest rate attached. For instance credit card debt often has a 55 day interest free period before a 20% interest rate kicks in. Now if you have $20,000 in credit card debt where you are only making the bare minimum repayment of 3% per month (figure is often between 2% to 5%), then you are repaying $600pm, then taking into account the compounding of interest, by the end of the year, you would have paid $??? in interest. Now if you have a $20,000 debt on your credit card and you have good credit, find a zero balance transfer 12-24 month interest free credit card to move it onto and be disciplined about paying it off. There is likely to be annual fees to take into account, but this is a good option.

Other debts you may want to take into consideration are personal loans and car leases (especially those with a balloon payment at the end). You can also get cash out for renovations, investment purposes, ??? Whilst you can borrow to pay the ATO or for holidays, I would recommend learning to budget to pay your taxes and if you want to go on a holiday, save for it.

If your debts are difficult to get rid of with your current income and you can use your property as security, it maybe well worth undergoing a debt consolidation. A home loan interest rate is far easier to deal with and you can choose the term you would prefer to pay it off.

Control in your hands, where it belongs.

Self Managed Superannuation Funds fundamentally give you more control over your superannuation as you have to manage it yourself. You will need at least $150,000 if you wish to buy a property as the deposit and costs and the fees to set up the SMSF come from this. The lender will also need to see 10% liquidity inside the fund for repayments. To note, the SMSF can have up to 4 members, where all members have to be directors of the corporate trustee.

Need something a bit smaller?

If you need some quick money that you can pay down quickly, these loans are much faster in their approval. Interest rates would be higher than that of a home loan.

Build your business success.

These loans are for non-residential purposes. It can be for commercial property like offices, warehouses, retail shops, hotels and resorts and property development. Be aware, if you hold more than 4 apartments in the same complex you may fall into this category.

Lenders often have an appetite to lend to professionals such as doctors who would like to purchase their own surgery. Lawyers and accountants are also in the same category.

Commercial loans are also for purchasing a business. Importantly, you need to think about your capability to manage and how successful you have been in the past. You will also need a business plan complete with past and projected financials. Think about what collateral a lender would accept. A secured loan would have a lower interest rate than unsecured debt. It is expected that you would have done your SWOT analysis thoroughly and what makes you unique in your industry. I have had clients who have been successful because the new business was piggy backing on the one they already had. Importantly, think of the 5 C’s of credit of Character, Capacity, Capital, Collateral and Conditions as to get any loan through, it must meet with the criteria that the lender wants.