The First Home Owners Grants varies from state to state, however within Victoria, if you are buying or building a new home valued up to $750,000, you may be eligible for First Home Owners Grant (FHOG) if you signed your contract on or after 01 July 2013. If you are eligible for the FHOG and you are buying/building is regional Victoria, you will receive $20,000. If the home is not in regional Victoria, you will receive a grant of $10,000.
Your new home can be a house, townhouse, apartment, unit or similar but it must be the first sale of the property as residential premises. However, you are not eligible for the FHOG if your spouse/partner has already:
- Received FHOG in Australia
- Owned a home or other residential property in Australia, either jointly or separately, prior to 01 July 2000
- Lived in a home in Australia which either of you owned or part-owned on or after 01 July 2000, for a continuous period of at least six months
- These criteria apply even if your spouse/partner are not an applicant with you for the FHOG
- If you purchased property on or after 01 July 2000 and have not lived in the property as your home, you may still be eligible for the FHOG.
- All applicants must be over 18 years of age at the time of settlement or completion of construction
- You (or at least one of the applicants) must be an Australian citizen or permanent resident
- You (or at least one of the applicants) must intend to live in the home as your permanent place of residence for at least 12 months, commencing within 12 months of settlement or completion of construction.
Absolutely not. We assess your situation, your needs and requirements and put your loan application through to the lender which suits YOU.
The short answer is no; however, the way this can be accommodated in practice is that stamp duty will come out of your cash deposit while the loan amount will increase to compensate. However, if this means the Lender is now lending you over 80% of the property value, you may have to pay Lenders Mortgage Insurance (LMI).
Everyone is different, each individual circumstance is different, and this means that there is no definitive answer. The best rate for one person may not be the best rate for another person. Based on your requirements, we will assess your circumstances and find the best lender and products (and therefore interest rate) which suits your needs.
A “non-conforming” home loan is a term used for home loans that don’t typically follow the major banks’ standard loan criteria. However, there are many finance providers making credit available to borrowers who cannot secure finance by meeting the borrowing standards which is normally required by banks and other home lenders.
If you’re in any one of the following categories, the alternative finance market may be your only borrowing option:
Low documentation, or ‘low-doc’
Borrowers having difficulty documenting their financial position, eg. Self-employed, especially if for less than three years, and others with a short borrowing history.
Borrowers wanting to buy a property in Australia but do not meet the residency requirements of Australian mainstream lenders, ie. Australian citizens living overseas or non-Australian residents.
Borrowers with infrequent or variable income whose ability to service a loan is less certain, eg. self-employed and casual workers. Pensioners, other welfare recipients and low-income earners may also fall into this category.
Borrowers with an adverse credit history of default on loans, a record of late payment or who have been bankrupt.
Borrowers wishing to borrow more than 90-95% of the purchase price of a property, ie. with a high loan-to-valuation ratio (LVR).
Borrowers wishing to secure their loan against properties that would not normally be considered appropriate security, eg. company title units or serviced apartments.
Fixed Rate – With fixed rate home loans, it allows you to lock in or ‘fix’ your interest rate for a certain period – usually between one and five years. This allows you to know that your repayments will stay the same during that fixed period. A fixed rate home loan is not as flexible as a home loan with a variable rate. This may be worth keeping in mind if you think your financial situation is likely to change in the future. The advantages of fixed rate loans are enabling you to lock in your interest rate, so you know what your repayments will be, protect yourself against interest rate rises, and plan and set financial goals with confidence.
Standard Variable Rate – With a variable rate loan, your interest rate can rise or fall throughout the life time of the loan. The interest rate that a bank offers can be affected by many factors, including in part the official cash rate set by the Reserve Bank of Australia (RBA) as well as higher or lower funding costs for the lender. A variable rate home loan can help you repay your home loan sooner by taking advantage of falling interest rates and continuing to pay the same repayments when rates fall. But if interest rates go up, your lender may increase your repayments. It can be harder to budget for the future as you can’t be sure how interest rates might move.
A split loan describes a home loan arrangement where you can have both fixed and variable interest rates on your loan at the same time. Basically, you can split your home loan into splits (or portions) and allocate an interest rate model to each portion. The ‘split loan’ option is typically viewed as a comfortable compromise between the pros and cons of fixed and variable interest rate loans. A split mortgage allows you to reap the benefits of both the security of fixed rate loan and the flexibility of a variable interest rate loan.
An “Interest Only” loan is different in the way they are repaid to a standard loan. Interest only home loans repay only the “interest” portion of the loan. However, while you are only making interest repayments which reduces the size of your repayments, you are not reducing the “principal” portion of the loan.
“Principal and Interest” or “P&I” is a term used for a type of repayment for your loan. It is divided into two portions. So, explained simply, “principal” is the loan portion that you are borrowing from (and repaying to) the bank and “interest” is the extra portion which you must pay back to the bank for borrowing that initial money.
An offset account is an account that is linked to your loan and allows you to pay off your loan sooner. It does this by reducing your interest payments by charging you interest on the balance of your home loan minus the balance of your offset account.
For example: if you have a home loan of $500,000 and you have an offset account with $10,000, then the bank would only be charging you interest on $490,000.
- $500,000 (home loan) – $10,000 (offset account) = $490,000 (amount interest is paid on)
Each lender will vary on how long their pre-approval lasts, but a pre-approval can generally last anywhere between 30-90 days.
Some loans will provide customers with loan pre-approval which usually means you are approved for a certain limit for a certain time (usually 30-90 days depending on the lender), subject to meeting the required terms and conditions. Providing that your circumstances have not changed since the pre-approval, you will then know exactly how much you will be able to spend on a property and have the freedom to make offers of properties.
The term LVR is an acronym for “Loan to Value Ratio”. The LVR is the loan amount that you are borrowing, which is represented as a % of the value of the property being used as security.
Essentially, the lower the LVR, the lower the risk to the bank/lender.
For example: you want to borrow $500,000 and want to purchase a property worth $600,000 and use that as security.
Then your Loan to Value Ratio would be: ($500,000 loan ÷ $600,000 property value) x 100 = 83% LVR
Lenders Mortgage Insurance (LMI) is an insurance cost that gets added onto your loan to protect your lender if you cannot repay your mortgage payments. In other words, it protects your lender from a financial loss. On a standard home purchase, you would usually pay LMI on your home loan if you are borrowing more than 80% of the property value on a standard loan.
In relation to loan approval, each lender will be different, and the complexity of each situation will vary. After you’ve sent us all your supporting documentation, it will then usually take 4-6 weeks from submission of your application to reaching your settlement date for your property. This of course can vary, depending on where you live, how quickly loan documents are returned to the lender or how busy the lender is.
Generally, we choose to not charge a fee. When we agree which lender to lodge your loan with, we then receive remuneration from that lender once your loan settles. This allows the service we provide to you to be free.
The remuneration is explained to you in a document called a Credit Proposal Disclosure. This ensures that you can have complete confidence that we are committed to fully disclosing all financial arrangements associated with your loan.
However, in some circumstances, such as business or commercial loans, we may negotiate a brokerage fee.