Screen Shot 2020-01-05 at 1.44.00 am
Brendan Coates

Brendan Coates

Home Loan Guide 2020

What type of buyer are you?

Understanding the type of buyer you are will help you navigate the complexities of the home loan market, to find the best loan for your needs.

Are you an investor or an owner occupier?

Do you want to buy a property as an investment or as a place to live in?

This fundamental question is crucial in selecting both a property and a loan to suit your needs.

Investors: If you’re looking to invest, you might seek an in-demand apartment in a high-growth property area, rather than a home in a specific area with features that match your lifestyle.

Owner Occupiers: If you intend to live in your property as an ‘owner-occupier’ you are seen as a more stable customer to lenders.
As you have a vested interest in keeping the roof over your head, lenders may offer lower interest rates.

 

Are you a refinancer?

A refinancer is someone who ‘refinances’ their home loan, by switching from one home loan to another. This can either be with the same lender, or with a different one.

Why refinance?

Keep an eye on your rate

Refinancing can potentially save you $1000s, so it’s worth checking your rate throughout the year and reassessing your loan every few years.

Home loans might be long-term financial products but the market is continually evolving and improving. There’s every chance there are new features available that don’t exist in your loan, if it’s been a while since the ink dried on your mortgage.

Change from fixed to a variable rate Borrowing money (e.g. for renovations) Switch to a more competitive rate

page3image3419239808

Insider Tip: Refinancing

Try to avoid extending the length of your loan term. This can in- crease the amount you pay in total interest on your loan and could negate any savings you might make from a lower rate.

 

page4image3419289760

Are you a First Home Owner?

A first home owner is someone who is buying a property for the first time, whether as an investment or to live in.

If you are going to live in the property, you may be eligible for the first home owners’ grant or a stamp duty tax exemption, to help you get a leg up into the property market. This is provided you meet a range of criteria.

Are you eligible for a

First Home Owner Grant (FHOG)?

First home owner grants began in 2000 but are increasingly hard to come by due the continued tightening of eligibility criteria.

Eligibility Criteria

You must be over the age of 18 and an Australian citizen or a permanent resident.

Grants are only for newly-built, substantially renovated properties, or properties that have never been occupied before.

You can’t have owned a property prior to 2000.
You can’t have applied for a first home owners grant previously.

You need to live in the property you buy with your grant for a minimum of six months, within the first 12 months of owning it.

How much can you get in your state?

NSW: Up to $10,000
VIC: Up to $10,000 ($20k in regional Vic) QLD: Up to $15,000
ACT: Up to $7,000
WA: Up to $10,000
SA: Up to $15,000
TAS: Up to $20,000 (until 30 June 2020) NT: Up to $26,000

First Home Buyer Concessions:

page5image3420934608

In the ACT, the FHOG is no longer valid, unless you entered into the transaction on or before 30 June 2019. From 1 July 2019, ACT first home owners can claim an exemption from stamp duty via the Home Buyer Concession Scheme. This scheme applies to vacant residential land and both new and established homes, anywhere in the ACT, at any price.

Concessions on stamp duty are available for first home buyers – up to $23,928.60 – but you can only claim either the FHOG or the concession. Non-first home buyers purchasing or building a new home can claim up to $7000, and seniors, pensioners and carers can claim up to $10,000.

Concessions are not available to first home buyers in South Australia, they can only apply for the First Home Owners Grant. The previously available concession allowing home owners to claim a concession for off-the-plan apartments endedon 30th June 2018.

For first home buyers in Victoria, a concession may apply to the purchase of a new home or a block of vacant residential land. The concession is based on a sliding scale, according to property value, provided buyers meet the eligibility criteria.

First home buyers in NSW can apply for both the First Home Owner Grant and the First Home Buyer Assistance Scheme (FHBAS). The FHBAS applies to new homes, existing homes and vacant land on which you intend to build a home – and can provide a concessional rate or an exemption on your transfer (previously known as stamp duty).

The QLD government provides a range of transfer duty concessions for people buying either
their first home, their principal place of residence or a vacant block on which they intend to build. The first home concession only applies to a home valued under $550,000 and can save you up to $15,925. If you do not meet the first home concession eligibility criteria, you may still be entitled to a concession, via the home concession which could save you up to $7,175.

First home buyers of established homes and pensioners downsizing to new homes may be eligible for concessions, depending on their settlement dates and other factors. The Tasmanian government has a handy tool online called PropertyBuyer, where you can check your eligibility for any concession or grant that may apply to your intended purchase of property.

When a home buyer is eligible for the First Home Owner Grant, a concessional rate of transfer duty will apply if the value of the dutiable property is below certain thresholds.

page5image3421213376 page5image3421213680 page5image3421214048 page5image3421214480 page5image3421214784 page5image3421215088 page5image3421215744

 

page6image3420117552

Are you a Renovator or Builder?

Planning to buy a vacant lot and build your dream home? Or perhaps you are in the market for a renovator’s dream?

Either way, if you intend to carry out major building work before you move into your home, then a construction home loan could be a good option.

Construction Loans

A construction loan is purpose-built to cover the expenses you incur as you build your home. It is structured to release money in stages, when certain milestones in the building process are reached.

Benefits

Interest-Only

A construction loan is purpose- built to cover the expenses you incur as you build your home.

It is structured to release money in stages, when certain milestones in the building process are reached.

page6image3420225872

You only pay interest on the money you’re actually using You may only need a 5% deposit of the total building cost