Buying your first home may be easier than you think – What you should know

Record low interest rates and the availability of various government assistance schemes are making the current property market highly desirable for first homebuyers, particularly those looking to purchase land and build a new home.

There’s no way to sugar coat the fact that, for most of us, buying a home is the biggest investment we’ll make in our lives – a process that requires determination, sacrifice and hard work. But the good news is financial assistance is available for eligible purchasers to help them make that first important step onto the property ladder.

Schemes like the NSW Government’s First Home Owner Grant (FHOG) – which offers various stamp duty breaks and concessions – and the First Home Super Saver (FHSS) Scheme mean if you are looking to buy a block of land on which to build your first home, your eligibility could make the process more affordable than you think.

With the Reserve Bank of Australia’s (RBA) decision to hold the official interest rate at 1.5 percent, Australia is currently in the longest period of interest rate stability on record. And that’s good news for buyers. Indeed, some economists are predicting the RBA will maintain the low rate beyond January 2020.

Together, low rates and various government financial assistance schemes are helping first-home buyers who are taking advantage of the conditions and forging their way into the market.

Land sales expert and Wirraway Land Sales Manager Sam Budden agrees it’s a good time to take the plunge and purchase land.

‘We’ve just released Stage 5 of Wirraway, our community at Thornton near Maitland in the Hunter, and because it’s the ideal location for young families we are seeing many people jump in and buy land sooner than they’d ever expected they’d be able to,’ he said.

‘People purchasing land at Wirraway as first-home buyers have saved up to $19,890*.’

Here’s a brief summary of some of the schemes currently available for new home buyers (you can check your eligibility with the NSW State Office of Revenue):

First Home Owner Grant (New Homes) Scheme

This only applies to those purchasing a new home and provides eligible buyers with $10,000 to go towards purchasing or building. It is available to those who have made an eligible transaction after 1 January 2016.

From 1 July 2017, the value of the home is capped at $600,000 for purchase and $750,000 for construction.

First Home Buyers Assistance Scheme – Stamp Duty concessions

This scheme offers eligible buyers exemptions or concessions on property transfer duty. It includes an exemption from stamp duty for new homes valued up to $650,000 and concessions on duty for homes valued between $650,000 and $800,000. This alone could save you up to $24,740.

 First Home Super Saver (FHSS) Scheme

Under this relatively new Federal Government Scheme, buyers can make voluntary concessional (before-tax) and non-concessional (after-tax) contributions into their super fund to save for their first home. If you are eligible, you can then apply to release your voluntary contributions, along with their associated earnings. This is capped at $15,000 of your voluntary contributions from any one financial year and up to $30,000 across all years. You can only apply for release once.

That said, despite the available financial assistance schemes, Mr Budden says securing finance can still prove a hurdle for first-home buyers.

‘Financial institutions are still stringent about approving loans because even a slight increase in interest rates could make life pretty tough for some borrowers,’ he said.

There are ways to increase your borrowing capacity and improve your chances of having your loan approved.

They include:

  • A clean credit history – pay your bills on time
  • Reduce your credit – do you really need four credit cards? The temptation to spend disappears if the credit does
  • Streamline your debt – talk to your bank about rolling your existing loans into one
  • Increase your savings – lenders look favourably on people who are good savers and most require a record of savings as part of the approval process
  • Financial records – no one likes doing it, but keeping your financial paperwork in order and being able to present everything you need saves a lot of time

To find out more about living at Wirraway, register online now or call our friendly team on 1800 891 958.

Disclaimer: Defence Housing Australia (DHA) and Robinson do not guarantee, warrant or represent that the information contained in this advertising and marketing material is free from errors or omissions. Any interested parties should make their own enquiries, seek expert advice and review the contract terms. *Calculation based on a $320,000 lot

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