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first home owner

Client stories in the 2020-21 financial year

Over the past 12 months we have worked side-by-side with many clients to support them in making life changing purchases. We get satisfaction out of securing finance to fund purchases that will never be forgotten.

Below is a review of just some of the people we have helped over the last year and a summary of how we assisted them in securing their new property.

Having the right mortgage advice from an honest adviser makes what can be a daunting process a walk in the park. If you would like assistance in securing finance to fund your next property purchase or refinance please give us a call on 03 5434 7690 or email endeavor@endeavorbendigo.com.au

 

Eloise

Eloise settled on her first home after we assisted her with securing finance and navigating through the range of First Home Buyer benefits available at the time. The First Home Buyer Stamp Duty exemption allowed Eloise to save $15,000 on stamp duty for the purchase of her established home.

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Jake and Laura

We assisted Jake and Laura at the end of 2020 to purchase some vacant land. The couple then begun their build which is now complete. Exciting times ahead! They were able to take advantage of both the regional First Home Owners Grant of $20,000 and the $25,000 New Home Builder Grant which were available at the time.

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Erin and Ryan

Erin and Ryan settled on the purchase of their first home in the middle of this year. This was particularly exciting as we were able to secure them the $20,000 regional First Home Owners grant, even though the house was already built. Pretty good perk for new eligible properties, particularly when you can move in straight away.

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Tom

When Tom’s parents decided to move interstate he couldn’t pass at the opportunity to purchase the house he grew up in! Often when a sale happens between family members, the State Revenue Office (SRO) will not allow for the first home buyer stamp duty waiver if the house is sold under market value.

We worked with Tom, his parents and the SRO to ensure the house was purchased at a price which would allow for Tom to still be eligible for the stamp duty waiver.

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Albert and Quynh

We assisted Albert and Quynh by working through their borrowing power and arranged finance prior to attending an auction in a hot market, allowing the newly engaged couple to bid with confidence. Being prepared before the auction proved useful given their complex self-employed income and existing investments.

The couple were successful in winning the auction, a good result for all involved!

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McKinley Builders

Working with McKinley Builders involved “owner builder” which many banks aren’t comfortable with even for self-employed licenced builders. This also involved bridging finance which allows clients to build and move in to their new house before selling their existing house.

Better than living in a rental while you build and needing to move twice!

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Tom

We guided Tom through the regional Victoria $20,000 First Home Owners Grant and also the $25,000 Home Builder grant to help him finance his new home. He was referred to us by his employer, McKinley Builders, who are in the story above.

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Dill and Georgia

We helped Dill and Georgia take advantage of both the regional Victoria $20,000 First Home Owners Grant and the $25,000 Home Builder Grant. The couple were referred to us by their accountant as Georgia had become newly self-employed.

We worked with her and formed a plan of attack and timing for her and Dill to get their build off the ground.

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Hayden and Tilley

We helped Hayden and Tilley take advantage of the regional Victoria $20,000 First Home Owners Grant as well as the $25,000 Home Builder Grant. The couple were referred to us by their friends Georgia and Dill, the clients in the story above. They recommended Hayden come and talk to us, and we also later found out that we had been recommended to Tilley by one of her colleagues who is also an exciting client! So they knew they were in good hands.

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Support for first home buyers and builders

The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers to build or purchase a first home sooner.

From 1 July 2021, an additional 10,000 spots will be in place for the First Home Loan Deposit Scheme, as well as new property price caps. These spots will be allocated on a first in, first served basis.

The scheme ensures that purchasers are only required to put down a 5% deposit on the purchase price of the property, with the government guaranteeing the remaining 15% of the deposit.

Purchasers are required to borrow the remaining 95%, however, you can save up to $17,000 by not being required to pay Lenders Mortgage Insurance.

For more information regarding the scheme, including guidelines and full eligibility criteria, click here.

Purchase Price Thresholds

New property price caps for the First Home Loan Deposit Scheme will come into effect from 1 July 2021. For Bendigo and other regional Victorian areas, this is great news! The price cap for these areas, which was previously set at $375,000, is now being increased to $500,000.

Click here to view the new price caps for all Australian regions.

 

We can help you take advantage of the First Home Loan Deposit Scheme and smoothen out the process of you building or buying your first home. Give us a call on 03 5434 7690.

First home buyer with government support; just how good can it get?!

At the moment there are a range of support packages available to first home buyers and we pulled off the ‘quadfecta’ for a recent client of ours.

The first home buyers had a combination of savings and gifted cash to compile together 5% of the land and build price, plus a clean and consistent rental history. The bank recognised this and were able to secure a land and build worth $440,000 with their deposit of $23,300 (or just over 5%).

Endeavor guided applicants in pursuing all available grants for first home buyers and builders and were successful in all applications, pulling off almost $60,000 in savings for the pair!

 

The grants the pair were eligible for included:

Grant

Grant amount
Cash saved as a result of First Home Buyer stamp duty exemption $4,370
Cash as a result of ‘First Home Owners Grant’ $20,000
Cash as a result of ‘Home Builder Grant’ $25,000
Cash saved as a result of ‘New Home Guarantee’ $10,000
Total benefit as first home buyers

$59,370

 

These outstanding results are a regular day at the office for our team. If you or a family member are looking to join the property market we highly recommend you speak to Llewe or Adam at Endeavor Finance to get the Endeavor Finance difference.

Call 03 5434 7690 or email endeavor@endeavorfinance.com.au

first home loan buyer scheme

First Home Loan Deposit Scheme is nearly here – all you need to know

What is the First Home Loan Deposit Scheme?

The Australian Government has introduced a First Home Loan Deposit Scheme (FHLDS) to support eligible first home buyers purchase a home sooner. It does this by providing a guarantee that allows eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5%.

The FHLDS supports up to 10,000 first home loan guarantees each financial year. Eligible borrowers can use the guarantee in conjunction with other government programs like the First Home Super Saver Scheme, state and territory First Home Owner Grants and stamp duty concessions.

The guarantee is not a cash payment.

When does the First Home Loan Deposit Scheme start?

The First Home Loan Deposit Scheme commenced on 1 January 2020. Applications for the Scheme are now open.

What type of property can be bought under the Scheme?

  • An existing house, townhouse or apartment
  • A house and land package
  • Land together with a separate contract to build a home
  • An off-the-plan apartment or townhouse.

Who is eligible for the Scheme?

  • Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
  • Singles with a taxable income of up to $125,000 per annum and couples with a taxable income of up to $200,000 per annum. Incomes will be assessed for the financial year preceding the financial year in which the loan is entered into.
  • Couples are only eligible for the scheme if they are married or in a de-facto relationship. Other persons buying together, including siblings, parent/child or friends, are not eligible for the Scheme.
  • Applicants must have a deposit of between 5 and 20% of the property’s value.
  • Loans under the Scheme require scheduled repayments of the principal of the loan for the full period of the agreement. If the loan relates both to the purchase of vacant land to the construction of a house on the land, the loan may be an eligible loan even if the terms of the loan agreement permit interest-only repayments for a specified period.
  • Applicants must intend to move into and live in the property as their principal place of residence (i.e. they must be owner occupiers).
  • Applicants must be first home buyers who have not previously owned or had an interest in a residential property either separately or jointly with someone else (this includes residential strata and company title properties, regardless of whether it was an investment or owner-occupied property and whether it was ever lived in).

Do property price thresholds apply?

Yes, the purpose of the Scheme is to help in the purchase of a modest home and the value of the residential property must not exceed the price cap for the area in which the property is located. The price caps for capital cities, large regional centres and regional areas are:

The capital city price thresholds apply to regional centres with a population over 250,000 (the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong), recognising that dwellings in regional centres tend to be significantly more expensive than other regional areas.

Find your suburb or postcode on the property price threshold: www.nhfic.gov.au/what-we-do/fhlds/eligibility/

How do you apply?

Applications for the Scheme are now open however numbers are limited – The first wave of 3,000 scheme places have already been allocated since the scheme started 1 January. The second wave of 7,000 for this financial year will be available from 1 February 2020 when potential applicants will have a panel of 27 lenders to choose from.

NHFIC will not accept applications directly. Endeavor Finance can guide you through the whole home loan process, and work with your chosen participating lender to lodge an application on your behalf. If you would like to make the most of this scheme give us a call to get you ready. Call 03 5434 7690 or email endeavor@endeavorbendigo.com.au

 

This article was originally published by The National Housing Finance and Investment Corporation (NHFIC).

Opportunities in the cooling property market

Things are looking up for first home buyers for the first time in years as house price growth begins to slow across the country. Read more

Property: Rent, buy or invest?

Buying a home has been heralded as the way to get ahead for generations of Australians. But with housing affordability a rising concern for would-be first home buyers and their parents, many younger Australians are beginning to weigh up whether it’s better to buy, rent or invest in residential property.

Despite record low interest rates, getting a foot on the property ladder has become increasingly difficult.

Against this backdrop, it’s hardly surprising that the proportion of first home buyers has fallen to less than 14% of all home buyers, the lowest level in more than a decade.ii

As the numbers of first home buyers fall, many younger Australians are focusing on buying an investment property instead. A recent survey by Mortgage Choice found 50.8% of investors who purchased a first investment property were 34 or younger, up from just 33.8% three years ago.iii

So which is best – buy, rent or invest?
Home sweet home

One of the best arguments for buying a home is that it forces you to save. Most of us find it difficult to save money today for long-term goals, but that is what paying the mortgage forces us to do. The pay-off is eventual ownership of an asset that enjoys favourable tax treatment when you sell or when seeking eligibility for the age pension and other means-tested benefits in retirement.

Unlike rents, which rise along with the cost of living, mortgage payments are fixed to the initial cost of the property and tend to fall relative to rents for similar properties over time.

Buying also provides the security of being your own landlord and the flexibility to renovate. After building up equity in your home you may choose to borrow against it to kick-start an investment portfolio.

On the downside, saving for a home deposit and transaction costs is a major hurdle for first timers. Ongoing costs for rates, maintenance and insurance can also be significant. While mortgage interest rates are currently at record lows, buyers also need to factor in the possibility of higher rates over the term of the loan.
When renting makes sense

Renting has the potential to free up money to invest in assets with a higher return than residential property. For this strategy to work, your rent must be less than you would otherwise spend on mortgage repayments. You also need the discipline to invest the savings if you want to get ahead.

Renting rather than buying can be a profitable strategy when other asset classes provide higher returns. Yet over the past 10 years residential property has been the best-performing asset class with an average annual return of 8% a year compared with 5.5% for Australian shares. iv

While this is no guarantee of future performance, it helps explain why many would-be first home buyers are taking a new approach to the old rent or buy equation.
The middle way

First time buyers often find they can’t afford to buy in an area where they want to live. So to get a foot on the property ladder they continue living in rental accommodation – or at home with Mum and Dad – and purchasing an investment property.

The advantage of this strategy is that your tenants help pay off the mortgage. And unlike a home you live in, costs such as mortgage interest, repairs, rates and insurance are tax deductible.

At the end of the day, the decision to buy, rent or invest will depend on your personal financial situation, the state of the housing and rental markets, the returns available on other investments and lifestyle. The important thing is to have a long-term housing strategy that won’t disadvantage you in later life.

If you or your children are weighing up whether to buy, rent or invest in property, give us a call on 03 5434 7690 to discuss the options in the context of your overall investment strategy.

 
ABS Housing Finance Australia, May 2016, 5609.0
ii Mortgage Choice, 2016 Investor Survey,17 June 2016
iii ASX Russell Investments 2016 Long-term Investing Report