First Home Buyers
From house hunting to arranging finance, there’s a lot to learn the first time you buy a property. Each step presents challenges and many First Home Buyers fall into the same traps. Here are nine common mistakes and how to avoid them.
First-Time mistakes to Avoid
- Over-stretching your budget – Once you’ve crunched the numbers on how much you can afford, stick to that sum. Don’t over-spend; even on a property you love.
- Rushing in – If you’ve been looking for a while, it can be tempting to compromise on important details because you’re frustrated with searching. But beware of hasty decisions you may regret later. Review your checklist of features and reassess what you really want.
- Getting too picky – At the other end of the spectrum, you should be prepared to make some sacrifices, especially if other features you desire can be added later.
- Failing to research – Get to know how much homes in your search area cost but also learn about future changes that may affect values, such as proposed land rezoning or roads that may be built nearby. Factor this information into your decisions.
- Not getting inspection reports – Structural reports and pest inspection can reveal otherwise hidden problems. Knowing about these upfront allows you to budget accordingly and maybe negotiate on price.
- Forgetting extra costs – In addition to the property price, you may have other costs such as the cost of title searches, solicitor fees, removalists and potentially upfront repairs. Ensure you’ve saved enough to cover those and other charges.
- Failing to arrange finance – You may think you know how much you can borrow, but does the bank agree? Speak to your lender about seeking pre-approval for a loan early in your house hunting process. This provides comfort that you’ll have the money when you need it.
- Job hopping – Recent or frequent job changes may make lenders reluctant to extend finance. If possible, this is something to keep in mind.
- Not reading the fine print – Sale and mortgage contracts are long and complicated but their contents are important. Read them in detail and have a lawyer explain what they mean.
First Home Owners Grant
The First Home Owner Grant (FHOG) is a national scheme funded by the states and territories to offset the effect of the GST on home ownership. The scheme was established to assist eligible first home owners to purchase a new home or build their home by offering a $15,000 grant.
The Scheme applies to new homes only and will reduce to $10,000 on 1 January 2016. Under the scheme, a one-off grant is payable to first home owners that satisfy all the eligibility criteria.
At Mortgage Excellence, Greg will guide you to grants and concessions available to first home buyers in NSW and a summary to help guide you to further information on the grant or concession most relevant to you.
Your eligibility is determined on the facts and circumstances as at the commencement date of the eligible transaction. This is the date of the contract to purchase or build a home or, for an owner builder, the date the foundations commenced to be laid. Eligible first home owners can receive the grant regardless of their income or the area in which they are planning to buy or build.
To be eligible for the $15,000 grant: you must meet the following eligibility criteria:
- The contract date must be on or after 1 October 2012
- The home is a brand new home
- You are over 18
- You or your spouse (including de facto spouse) have never held a relevant interest in any residential property in Australia prior to 1 July 2000. However, you may be eligible if you or your spouse, including de facto spouse, have only had a relevant interest in any residential property in Australia on or after 1 July 2000 and you have not resided in that property for a continuous period of at least 6 months.
- The value of the property must not exceed the First Home Owner Grant Cap of $650,000 for contracts dated between 1 October 2012 to 30 June 2014
- The value of the property must not exceed the First Home Owner Grant Cap of $750,000 for contracts dated on or after 1 July 2014
- You have not received a first home owners grant in any State or Territory, unless subsequently repaid
- You need to live in the home for a continuous period of at least 6 months
- At least one applicant is a permanent resident or Australian citizen
- Each applicant must be a natural person and not a company or trust.
If you wish to discuss your individual situation please contact Greg direct for a discussion regarding your options and strategy.
How to apply for the First Home Owner Grant
At Mortgage Excellence, Greg will assist you to apply for the First Home Owner Grant at the earliest possible time.
Also, refer to the New South Wales Office of State Revenue for any recent updates
Mortgage Excellence is the Best Choice for Home Loan Advice!
If you wish to discuss your individual situation please contact Greg direct for a discussion. Mortgage Excellence is here to serve you!