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First Home Loan Deposit

The Australian Government has created an initiative designed to support eligible first home buyers get into the property market sooner. It can be a bit confusing to understand so we’ve tried to simplify it and break it down into the important points, focusing on what it is and who is eligible, and tips on things to look for.

What is it? The First Home Loan Deposit Scheme (FHLDS) works by having part of the home loan from a participating lender guaranteed by NHFIC*. This aims to enable first home buyers to secure a home with a deposit of as little as 5% (lender’s criteria apply).

The FHLDS became available from 1 January 2020 where 10,000 places were released for the remainder of the financial year. Another 10,000 Scheme places will be available from July 2020.

Major banks – CBA and NAB – were given 5,000 places, all of which are now currently reserved. The remaining 5,000 scheme places for the current financial year are being offered through 25 non-major lenders. Most of these spots are still available.

Even though the scheme places with the major banks are reserved, there is a chance they may become available so first home buyers can continue to engage with the major banks. Also, you can apply through more than one lender to access a competitive loan rate; you will only receive one place.

Take away points: Most of the 5,000 scheme places offered to non-major banks are still available Another 10,000 places will be available from July 2020 Participating lenders can be found through this link https://www.nhfic.gov.au/what-we-do/fhlds/how-toapply/

Eligibility Firstly, you need to decide if you’re applying for the FHLDS as a single (only you named as the borrower) or as a couple (both you and your partner named as borrowers). Eligibility criteria include these areas: • An income test Singles: your taxable income for the financial year 2018-19 must not be more than $125,000 Couples: your combined taxable income for the financial year 2018-19 must not be more than $200,000 • A prior property ownership test It is required to have no previous property ownership including house or land, residential or commercial If you are applying as a couple, neither of you can have previously owned any property • Citizenship test You (or both of you) must be an Australian citizen at the time you enter into a home loan • A minimum age test Minimum age is 18 years old • A deposit requirement Must have at least a 5% deposit, but no more than 20% inclusive • An owner-occupier requirement The Scheme does not cover Investment properties You must move into the property within 6 months from the date of settlement, or, if later, the date an occupancy certificate is issued You must continue to live in that property for so long as your home loan has a guarantee under the Scheme. Your participating lender will be able to explain the terms and conditions and repercussions should you move out.

Tips to remember • The property being purchased must be residential The purchase price must be under the price cap for its location https://www.nhfic.gov.au/what-we-do/fhlds/ property-price-thresholds/ • The loan term will be of 30 years or less There are certain conditions surrounding house and land packages, off-the-plan, etc. Please check with your participating lender A mortgage broker can also help reduce the stress and confusion of the FHLDS. Enquire with a broker such as from the Funding Force team to find out more. http://fundingforce.com.au/

Articles

Selling Your Home in 2020

2019 saw the housing market tell two stories; the first half of the year was slow with lower numbers of properties on the market, yet the second half demonstrated some outstanding results.

Market forecast Coming off the back of a significant turnaround, we are likely to see a gradual influx of new listings in 2020 as vendor confidence increases.

Thanks to a few interest rate cuts and the introduction of the First Home Loan Deposit Scheme on January 1, buyers will be entering the property market sooner than otherwise thought, especially first home buyers.

What are buyers looking for? We’ve noticed there are a few things that home buyers look for. Locality near public transport and good schools is often a priority for many people. When it comes to the house itself, home security features like security doors and good locks, add appeal to any home. Additionally, houses that have any extra room for a home office or a multipurpose ‘wellness’ type room, have come up more popular. Lastly, single stories on a smaller block are starting to be less dreaded and more sought after, as people are looking to save time on home and garden maintenance. With this in mind, renovated properties are usually preferred to those needing work done.

Tips for the seller

• Presentation In an era where the internet is usually where we see things first, the impression an online listing leaves is invaluable. It has been found that properties that don’t need work done are preferred so make sure your home is in tip top condition.

A listing that doesn’t present a sharp looking property tends to lose interest and falls further down buyers’ lists. It is also likely to lose buyer interest if the property isn’t nicely presented during open for inspections.

• Declutter and depersonalise The easiest sales are those that have a wide target audience. You can do this by making the property easy for buyers to connect with. Simple ways to do this is to make your home more neutral; remove excessive family pictures on walls, neutralise bright paint colours and think about what might be around suggesting it is still very much the vendor’s home. Consider bringing in a third party to provide advice on what should stay and what should go. You could ask a property stylist or a friend happy to critique the house.

• Clean and prep Similar to our first tip, presentation is key so we suggest taking care to ensure detail is put in to cleaning and preparing the property for sale. That means doing more than just your usual cleaning checklist; think more spring clean. Additionally, you might be an idea to get a building inspector look at your home. That way you can be prepared for anything that needs fixing in advance.

• Talk to an agent Finding the right agent for you can be tricky. You want to ensure the person running your property campaign has the same values as you and understands your circumstances. They also need to have the right passion and abilities to get you the best price. One of our agents can provide a free, no obligation market appraisal to tell you the value of your home, and how they can best help you sell. Don’t hesitate to find out more by getting in touch with your local office.