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

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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.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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

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.

So here’s to a prosperous 2020!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Swipe right to buy your first home

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A new web platform described as a ‘dating app but for home-ownership’ says it can help users enter the property market in half the time it usually takes.

Mortgage Mates – the brainchild of Perth-based mates Daisy Ashworth and Jess Vesely – uses algorithms to match you with like-minded individuals who share similar housing preferences but also don’t yet have a big enough deposit to crack the property market.

Ways you can search for ‘mates’ include Australia-wide location options, housing choices (apartment, unit, house or land packages), price, age and gender.

Once connected and keen to buy, the duo say they can link you with legal services to help you safely and securely enter the property market.

The co-founders say that by matching up with another user who shares your housing aspirations you can have the security of home-ownership over renting or living in a share house.

The other major benefit of pooling your money with like-minded individuals is increasing your property options, the co-founders say.

Another way to crack the property market sooner

Another way to get into the property market in 2020 is through the federal government’s First Home Loan Deposit Scheme, with applications for the scheme opening on 1 January 2020.

Run by the National Housing Finance and Investment Corporation (NHFIC), the scheme this week launched an interactive online eligibility tool to assist first home buyers determine their potential eligibility (with property price caps further down the page).

Under the scheme, some first home buyers will be able to borrow up to 95% of the value of their property without forking out for Lenders Mortgage Insurance (LMI).

Last week it was announced that NAB is the first lender on the panel. The remainder of the panel will be announced in the coming weeks.

Get in touch

There’s one big catch when it comes to the First Home Loan Deposit Scheme – and it’s a bit of a doozy.

The scheme is limited to just 10,000 first home buyers loans each year on a ‘first come, first served’ basis.

When you consider that the number of Australians who bought their first home in 2018 totalled 110,000, if you are planning on using it in 2020, it’s best to get the ball rolling on it now.

So if you’re considering purchasing a property but don’t have a 20% deposit saved up yet – get in touch.

We’d love to run you through the scheme in more detail and help you plan ahead for the new year.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Banks ‘too cautious’ on SME loans: financial regulators

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The country’s top financial regulators are concerned banks are ‘too cautious’ when it comes to loans for small business borrowers.

The Council of Financial Regulators (CFR) – which is chaired by RBA governor Philip Lowe and includes APRA, ASIC and federal Treasury – met to discuss the tight credit conditions for small businesses and the associated reduced risk appetite from many lenders.

As a result, ASIC will soon officially confirm that the responsible lending laws don’t apply to small businesses.

In their post-meeting quarterly statement, the CFR stressed that the flow of credit is fundamentally important to the functioning of the Australian economy.

“(We) discussed the concern that lenders’ risk appetite for some types of lending may have swung too far towards caution,” the CFR said.

The CFR’s statement is in response to repeated complaints from bankers this year that tighter small business lending has been an unintended consequence of the Hayne royal commission.

Great, so what are they actually doing about it?

During the meeting, CFR members discussed that in the coming weeks ASIC will release updated guidance on responsible lending provisions.

“It will confirm that responsible lending requirements do not apply to loans made predominantly for business purposes, regardless of the type of security offered for the loan,” said the CFR statement (and yes, they even bolded the ‘do not’ bit!).

The guidance will also assist lenders to better understand their obligations and reduce the risk of non-compliance.

Great, but what can I do about it?

That’s the easy bit – get in touch with us.

The lending appetite in the SME space is something we’re well across and are more than happy to bring you up to speed on.

So drop us a line and we’ll be happy to run you through some of your business’s financing options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Banks ‘too cautious’ on SME loans: financial regulators

,

The country’s top financial regulators are concerned banks are ‘too cautious’ when it comes to loans for small business borrowers.

The Council of Financial Regulators (CFR) – which is chaired by RBA governor Philip Lowe and includes APRA, ASIC and federal Treasury – met to discuss the tight credit conditions for small businesses and the associated reduced risk appetite from many lenders.

As a result, ASIC will soon officially confirm that the responsible lending laws don’t apply to small businesses.

In their post-meeting quarterly statement, the CFR stressed that the flow of credit is fundamentally important to the functioning of the Australian economy.

“(We) discussed the concern that lenders’ risk appetite for some types of lending may have swung too far towards caution,” the CFR said.

The CFR’s statement is in response to repeated complaints from bankers this year that tighter small business lending has been an unintended consequence of the Hayne royal commission.

Great, so what are they actually doing about it?

During the meeting, CFR members discussed that in the coming weeks ASIC will release updated guidance on responsible lending provisions.

“It will confirm that responsible lending requirements do not apply to loans made predominantly for business purposes, regardless of the type of security offered for the loan,” said the CFR statement (and yes, they even bolded the ‘do not’ bit!).

The guidance will also assist lenders to better understand their obligations and reduce the risk of non-compliance.

Great, but what can I do about it?

That’s the easy bit – get in touch with us.

The lending appetite in the SME space is something we’re well across and are more than happy to bring you up to speed on.

So drop us a line and we’ll be happy to run you through some of your business’s financing options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.