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The race is on: thousands expected to rush to apply for first home loan scheme

The race is on: thousands expected to rush to apply for first home loan scheme

17 Jan 2020 | First Home Buyers, Government subsidies

If you’re thinking of taking advantage of the new First Home Loan Deposit Scheme then you better act quick, as thousands of first home buyers will likely rush to apply for the 10,000 guarantees available.

When the scheme first kicked off between January 1 and 10, more than 3,000 first home buyers applied for one of the 10,000 spots up for grabs this financial year – and places in the scheme for the 2019-2020 financial year are now full.

So it’s fair to assume we’ll see similar numbers jostle for one of the 10,000 spots when the scheme restarts on July 1.

Under the new federal government scheme, first home buyers must find a home within 90 days of approval.

The Commonwealth Bank (CBA) and the National Australia Bank (NAB) have been allocated a total of 5,000 places.

Another 5,000 spots will be available with 25 smaller lenders.

After those spots have been filled, first home buyers will have to wait until the new financial year on 1 July 2021 when another 10,000 places will become available.

What exactly is the First Home Loan Deposit Scheme?

Ok, so usually first home buyers with a deposit of less than 20% pay Lenders Mortgage Insurance (LMI) when taking out a home loan.

But under the government scheme, first home buyers with only a 5% deposit could be eligible to purchase a property without having to pay for LMI – which could save them as much as $10,000.

Now, it’s important to note this is not a handout – it’s a government guarantee to help first home buyers break into the property market with a smaller deposit.

In order to be eligible first home buyers can’t have earned more than $125,000 in the previous financial year, or $200,000 for couples (and both need to be first home buyers).

More details on eligibility can be found on the scheme’s website www.nhfic.gov.au. You can also check out the property price caps here.

Want to find out more?

If you’re thinking about purchasing your first home soon and are considering applying for this scheme – give us a call today.

We’d love to run you through the scheme in more detail and, if you’re eligible, help you apply for it through one of the scheme’s participating lenders.

How to avoid underinsuring your home

How to avoid underinsuring your home

10 Jan 2020 | First Home Buyers, News, Personal Finance

With Australia currently enduring its worst bushfire season on record, we all want to do our little bit to help out, so today we thought we’d discuss the important topic of underinsurance.

Indeed, researchers are warning that the nation is facing an underinsurance crisis, according to a recent report by the ABC, with the Insurance Council of Australia saying more than four out of every five homes affected by bushfires are underinsured.

Federal MP Susan Templeman had her home destroyed by a bushfire in 2013 and had one thing on her mind as she was walking past burnt-down houses on her street: “Gee, I hope I’ve paid the insurance”.

Fortunately, her insurance payments were up to date. However, her insurer still didn’t give her the news she was hoping to hear.

While her insurer said they’d pay out her claim, they advised they wouldn’t rebuild her home as she was underinsured.

You see, even though Ms Templeman had insured her place for its market value of $400,000, the cost to rebuild was about $600,000.

“And that was just like a bolt from the blue. It completely threw us,” she said.

Ms Templeman ended up selling an investment property to help make up the shortfall. But her neighbours on either side never rebuilt.

How are homes underinsured?

Chloe Lucas, research fellow at the University of Tasmania, explains that most homeowners don’t find out that they’re underinsured until it happens to them.

“Most people use insurance calculators online and it’s very hard to get those to give you a calculation that really reflects the real value of your property,” Ms Lucas told the ABC.

“They are most often based on the market value of your property, and that’s very different to the cost of rebuilding after a disaster.”

Ms Lucas suggests owners consider adding at least 20% to what they think their house is worth to avoid underinsurance.

How else could it affect me?

Chances are, if you haven’t updated your home and contents insurance in several years, you could be underinsured.

There is also an astounding 23% of Australians who have no home and contents insurance at all, says the Insurance Council of Australia.

How can I avoid underinsurance?

Here’s a quick checklist to see whether you’re sufficiently covered:

1. Check your policy and talk to your insurer to understand how much they will currently pay and under what circumstances.

2. Pay attention to clauses around fires and floods, particularly if you live in a higher-risk area.

3. Make sure all your items are covered – many people find they are underinsured because they forgot to include new pieces of technology, home renovations or jewellery.

4. Consider the worst-case scenario – if your house and contents were to be destroyed, does your policy cover the full cost of rebuilding? Make sure you consider building costs today, rather than the original cost of building your house.

Final word

If your home or suburb has been affected by this bushfire season, please know that our thoughts are with you – we know as much as anyone how important the family home is.

If you’re in an area that’s susceptible to bushfires or other natural disasters but has not been affected this season, we hope you stay safe and that this article has been helpful.

First come, first served: first home buyer scheme now open

First come, first served: first home buyer scheme now open

3 Jan 2020 | First Home Buyers

Applications for the new First Home Loan Deposit Scheme are now open, with 10,000 guarantees available to first home buyers looking to get a leg up into the property market.

Now, with 10,000 spots it might sound like you’ve got plenty of time up your sleeve to take advantage of the new scheme, but consider this: 110,000 Australians bought their first home in 2018.

So if you’re interested in applying for this scheme, you’ll want to put it at the top of your to-do list in 2020 and get in touch with us ASAP.

Back up a little. What’s this new scheme again?

Ok, so currently people with a deposit of less than 20% usually have to pay Lenders Mortgage Insurance (LMI).

But under the government scheme, first home buyers with only a 5% deposit could be eligible to purchase a property without forking out for LMI.

Now, it’s important to note that this is not a handout – it’s simply a government guarantee.

But this guarantee can give first home buyers a “leg up”, says the federal government, as it could save you as much as $10,000 in LMI insurance.

Any more details?

The scheme commenced on 1 January 2020.

In order to be eligible first home buyers can’t have earned more than $125,000 in the previous financial year, or $200,000 for couples (and both need to be first home buyers).

More details on eligibility can be found here.

The property price caps

Below are the property price caps for each city and regional centre with a population over 250,000, followed by the price caps for the rest of the state.

– NSW: $700,000 (Sydney, Newcastle/Lake Macquarie, Illawarra) and $450,000 (rest of state)

– VIC: $600,000 (Melbourne and Geelong) and $375,000 (rest of state)

– QLD: $475,000 (Brisbane, Gold Coast, Sunshine Coast) and $400,000 (rest of state)

– WA: $400,000 (Perth) and $300,000 (rest of state)

– SA: $400,000 (Adelaide) and $250,000 (rest of state)

– TAS: $400,000 (Hobart) and $300,000 (rest of state)

– ACT: $500,000

– NT: $375,000

Get the ball rolling

If you’re considering purchasing your first home in 2020 but don’t have a 20% deposit saved up yet – get in touch.

We’d love to run you through this new scheme in more detail and, if you’re eligible, help you apply for finance with one of the scheme’s participating lenders.

How to spread some free Xmas cheer these holidays

How to spread some free Xmas cheer these holidays

20 Dec 2019 | Family & Friends

Did you know there’s around $1.1 billion owed to Aussie families in unclaimed shares, bank accounts and life insurance? With the festive season just around the corner, here’s how to find some long lost funds for you and your family in less than one minute.

They say Christmas is a time for giving. But let’s be honest, it’s always nice to get a little surprise, too.

The beauty of this little life hack is that – if you’re lucky – you might experience both ahead of the budget-blowout that is the festive season.

Don’t believe us? A friend who gave us the idea for this timely post found $1140 for his aunty and $68 for his brother. That’s more than $1200 by simply searching his last name in a government register.

Sure, he didn’t find any money for himself – but his brother has promised to finally fork out for the family Xmas turkey this year!

How to find unclaimed money

Ok, so it’s super quick and simple.

Just click on this ASIC MoneySmart website link. Then type in your name in the search bar.

If nothing comes up try typing in just your last name and you might even spot some relatives who are owed money.

If the search brings up money that’s owed to you, simply scroll down the bottom of the ASIC MoneySmart website link for steps on how to claim the money.

But wait, there’s more

The above link is run by the federal government. But there are also state and territory registers for unclaimed money as well, including:

NSW – Revenue NSW

Victoria – State Revenue Office Victoria

Queensland – Public Trustee of Queensland

Western Australia – WA Department of Treasury

South Australia – SA Department of Treasury and Finance

Tasmania – Tasmanian Department of Treasury and Finance

ACT – Public Trustee and Guardian for the ACT

Northern Territory – Northern Territory Treasury

Searching for unclaimed money in the above registers is straightforward and similar to the process for the MoneySmart register.

Have a great festive season

Whether your search for unclaimed money is fruitful or not, we hope that you enjoy celebrating the festive season with family and friends in the coming weeks.

And when 2020 rolls around, if you need to check anything finance-related, please don’t hesitate to reach out to us. We’d love to work with you again in the new year.

Season’s Greetings! Here’s to a prosperous 2020!

Season’s Greetings! Here’s to a prosperous 2020!

20 Dec 2019 | Family & Friends

With 2019 drawing to a close, we hope you’re shifting into holiday mode and getting ready to relax and unwind (or, at least, looking forward to a few public holidays!).

Hasn’t the year just flown by?

It only seems like only yesterday that the RBA cut the official cash rate for the first time in almost three years. But that was more than six months ago, and the RBA has cut the rate another two times since.

Now the official cash rate is sitting at a new record low of 0.75% – and financial markets now believe there’s a 45% chance of a rate cut when the RBA Board next meets in February.

But enough about rate cuts

Whether you’re celebrating the festive season with family and friends, getting away somewhere nice and relaxing, or working through (gotta make hay while the sun shines), we hope you have a wonderful end to 2019.

And when 2020 rolls around, if you need to check anything finance-related, please don’t hesitate to reach out to us.

We look forward to working with you again in the year ahead.