Category: Blogs

Everything You Need to Know About the Federal Governments 5% Loan Deposit Scheme.

The legislation passed on the 16th of October 2019, setting up a 1 January start for First Home Buyers to purchase their first property with only a 5% deposit and no lenders mortgage insurance charges. It is all conducted by the National Housing Finance and Investment Corporation and applies to new and existing property.

There are still a number of details up in the air… BUT here’s what we do know….

HOW DOES IT WORK?

The Australian Government will be your Guarantor on your first home purchase. This offer is for the first 10,000 first home buyers from the 1st of January 2020, for up to 15% of the property purchase value.

What that means is, if you can come up with a 5% deposit, together with your new found guarantor, you can go to the bank and get a mortgage with a 20% total deposit (5% from you, 15% from the government).

Because you will have a 20% deposit, the banks will not charge you Lenders Mortgage Insurance, which can be significant savings.

EXAMPLE

Property value = $500,000

Deposit required = $100,000

Guaranteed by Gov, 15% of the 500,000 = $75,000

Needed by you (5%) = $25,000 (minus your 15k first home owners grant) = $10,000

WHO IS ELIGIBLE?

First Homes Buyers (cannot be used for investment) using the First Home Owners Grant (building brand new)?
Single buyers earning less than $125,000 per year
Couples earning less than $200,000 per year

There will also be regional price caps that are yet to be announced. These will determine what type of property you can buy and what the value of the property is.

We still don’t have information on whether the State Governments First Home Owner Grants will be able to be used for the deposit amount.

HOW DO I APPLY?

This is still a grey area, but the short answer is to get your ducks in a row now!

We do know is that this is going to be a first-in best-dressed scenario. If you want to be one of the lucky 10,000 we believe you will need to have your finance application in by the end of the first week of January.

It appears the applications will be done through your selected Bank, who will have separate products which incorporate the government guarantee. Each bank will have their own hurdles to jump over, but we will have to wait and see what they are.

We expect this will only be eligible for those applying for finance approval from Jan 1st. Which means, you need to have a house and land contract signed and ready to submit your application.

There was 108,000 first home loan applications in 8 months up to August this year, so you can expect this scheme to be in very high demand and we are predicting it will be over in the first two weeks of January.

Can You Help?

Yes. We can help you find the property you love, have all the ducks in a row, including signed contracts, valuations done, and the finance application ready with our finance partners to submit to the banks on January the 2nd.

Get in touch today, and let’s set up a plan.

The Two Major Bank Policy Shifts Which Could Get You Your New Home Sooner

In the past few weeks, there have been two key changes that have rolled through the policy books of the major banks, which mean First Home Buyers now have many more options for getting into their first property.

CHANGE No.1 – REDUCED SERVICEABILITY RATE

What is it?

Put simply, the banks previously assessed how much you could borrow as if you were paying interest rates on your mortgage of 7.25% or higher. This gave them protection if rates were increased in the future. With the policy changes, they now assess how much you can borrow on an interest rate 5.5% or higher.

What does it mean?

What it means is that while your income and debts and living expenses will be the same, the banks will offer to lend you up to $100k more on your home loan. For people with a number of kids or significant personal loans which are hindering there ability to get a loan, this might just make it possible.

How do I take advantage!?

Give us a call or talk to your trusted finance specialist. When looking at finance there are always two questions, how much can I borrow, and how much can I afford to borrow, given short and long term goals. We don’t advocate over-extending yourself, but if this change means that you can now get into your first property, and the repayments are just as much as your rent, take advantage now!

CHANGE No.2 – INTEREST RATE CUTS

What is it?

I’m sure everyone is aware that rates have been cut, but it is important to know when these have actually been implemented across the bank offerings. Well that time is now.

What does it mean for me?

On a $450,000 loan, a .25 rate cut will mean a saving of $15 / week or $65 / month. It means that you can pay your mortgage off quicker and ultimately pay less interest. We are seeing 3 years fixed rates at 3.4% or lower, and some rate offers even sneaking below the 3% mark at 2.99%!

How can I take advantage?

Get in touch now, or speak to your trusted advisor in this space.

*First Home Buyer Alert* – Aug 2019 Update – Major Bank Policy Change, Your Borrowing Capacity Has Now Increased!

AUGUST 2019 UPDATE:

The majority of major banks, including Westpac, CBA and ANZ have now reduced the serviceability criteria for getting your first home loan. This means that the banks will now assess how much you can borrow based off approximately a 5.5% or higher interest rate, instead of a 7.5%or higher interest rate. For most people, provided you have a sufficient deposit, you may be able to borrow $50k – $100k more.

Get in touch today to see what options may be available to you.

PREVIOUS ARTICLE – MAY 2019:
Government regulator APRA has yesterday announced that they will no longer require banks to assess buyers lending capacity based on a hypothetical interest rate of 7%.

The Short and Very Sweet Summary

As of July, if you speak to your broker, or head into your local bank, there is a good chance your borrowing capacity (how much of a loan they think you can handle), will have increased from your last visit. If your broker advised you could borrow up to $450,000,  that might shift up to $500,000, provided you have a sufficient deposit.

With property prices at or nearing a low point, interest rates at an all time low, and the introduction of these changes to lending, it makes for an excellent time to start looking at your property options.

Who Is APRA?

APRA oversees and regulates all banks in Australia. It is short for the Australian Prudential Regulation Authority.

What is the current situation?

Bank’s have been required to assess your ability to service a loan based on if the interest rate increased to 7%, or 2.25% above there standard rate, whichever was higher.

Interest rates are at an all-time low, and likely to decrease further with the next Reserve Bank announcement. The 7% figure has become too much of a buffer, restricting people’s ability to get into the market, particularly with Sydney / Melbourne prices.

What is changing?

APRA have indicated they will abandon their rate floor of 7%, and potentially increase the buffer from 2.25% to 2.5%. So at the current 4% lending rates, the serviceability assessment will be based off 6.5%, not 7.25%.

What this means in reality is that borrowers may see their capacity increase from 500,000 to 550,000, or more.

Will it happen and when does is start?

APRA have a one month consultation period, with the changes coming into play in June 2019. It is likely the banks will wholeheartedly agree, given they can write more loans, and larger loans.

What does it mean for me now?

A few things.

If you are in the market for a property but haven’t been in a position to get the type of property your after, this could be a game changer.

This is particularly big for us here at Hello Home, as we assist people with their deposit funds, but it is quite often the serviceability which restricts them. We are excited now to help more and more people get into the market.

Can you help advise on my borrowing capacity?

We have a specialist finance partner who is an absolute guru in determining exactly how much you can borrow and which bank will be able to get you the best deal. Get in touch with us today to learn more.

Why I Love Lenders Mortgage Insurance.

This might be a bit of an unpopular opinion, but there’s a very good reason behind this madness……

The short answer to why I believe LMI is the greatest gift a first home buyer can receive is a simple one. It helped me buy my first property in a market that was beyond reach. Plain and simple, LMI gets you into your first home quicker, and for most people, its the only way how.

What is leaders mortgage insurance?

For those who aren’t sure, LMI is a one-off fee that you are charged by your lender if you dont have a 20% deposit. It’s designed as an extra piece of protection to the lender in case you default on your mortgage (can’t repay).

In reality, a 20% deposit is near impossible to save. The median house price on the Sunshine Coast, is $550,000 – a 20% deposit to purchase this house and not pay LMI, would mean you need to save $110,000! Pretty ridiculous right?

HERE’S HOW I GOT LENDER’s mortgage insurance to work for me not against me.

When I purchased my first home in 2017 I spent two years prior completely dedicated to saving a house deposit, this is two-minute noodles every night dedicated. I wanted to buy a house more than anything in the world. 

In two years I had saved close to $30k. 

At this rate it would have taken me more than 5 more years to reach the 20% deposit in the example above. I couldn’t possibly continue to live how I wanted to live whilst doing this.

This is where LMI became my best friend. With my 30k plus the first home owners grant of 15k I had enough in my corner to make my first move at property.

I purchased my first property for $370,000 – a brand new 3 bedroom townhouse, close to where I wanted to live and close to work. With this I was charged just over $4,000 in LMI.

Now just to clarify, this $4k payment is not a bill that gets sent out in the mail, that you have to stick on your fridge and circle the due date on your calendar. This amount was covered behind the scenes by my deposit and FHOG and magically incorporated into my mortgage (not actually magic, my broker did this).

Here’s the best bit…. My property grew in value by $20k in the first year. That’s 20k worth of equity in my back pocket. If you’re keeping up here, in the same year trying as hard as I could at MOST I would have been able to save another $15k (with still 4 years to go to avoid LMI)

My property did the savings for me & completely covered what I spent in LMI.

WHAT WOULD HAVE HAPPENED IF I TRIED TO SAVE TO AVOID LMI? ​

Now, the extra piece of this equation is that with the same property I wanted to buy is now worth $390,000 – my savings would have to move quicker than the rate the property was growing. Remember the 20% is based on the value of the property your wanting to buy.

The dangers of trying to save to avoid LMI is that you are literally saving yourself out of the market. Average house prices are growing at 7% per year. The same property you wanted to buy for $550,000 is now worth $588,500 – the 20% deposit that you needed has just gone from $110,000 to $117,700 – and this is happening each year that you’re saving. 

If you would like to know whether you might be financially able to get into the market now, take our assessment below and set a no obligation appointment to go through your options. 

What the Government’s 5% Deposit for First Home Buyers Announcement Will Mean for You

Firstly here are the key facts:

What is it?

It’s called the First Home Loan Deposit Scheme, so a fairly straightforward name and a good start.

Effectively the Government is guaranteeing 15% of your property purchase, meaning that you will only need to have 5% of your own saved for the initial deposit. More importantly, you won’t need to pay any Lenders Mortgage Insurance (‘LMI’), which would typically be over $14,000 for a loan with a 5% deposit.

So if you are purchasing a $500,000 house and land package, you would only need $25,000 for your initial deposit. Right now, even with a 5% deposit, you would need at least $40,000 factoring in LMI.

Your loan will still be through one of the banks (including the smaller lenders) as usual, but the Government (through the National Housing Finance and Investment Corporation) will be guaranteeing the bank for 15% of your properties value should you default on the loan.

Who Is Eligible

1. First Home Owners, so those who have never owned property before. There is no further detail as to whether this might include those who have owned only investment properties before.

2. Only 1 in every 10 First Home Buyers at current levels will be able to access the guarantee as it is capped to 10,000 applicants. There are over 100,000 First Home Owner loans approved each year.

3. It will be on a first come, first served basis.

Will it happen and when does is start?

The Coalition have stated it will commence on 1 January 2020. Labor came out a number of hours after the announcement and stated they too will support this initiative. In all likelihood then, it will go ahead, however the details are bound to vary between now and the end of the year.

What does it mean for me now?

A few things.

1. If you have been renting for more than 6 months through an agent, as a First Home Buyer you can already access a loan product that only requires a 5% deposit. However, you will be required to pay Lenders Mortgage Insurance which can be up to $15,000. This means for a $500,000 purchase, you are paying ~$40,000 as your deposit, or 8%. Therefore, this is genuinely a valuable offer.

2. There may only be a 10% chance you will be able to access the loan if you are purchasing next year. I think you will need to have all your ducks in a row, with the property selected, contracts ready for signing and a good broker on your side to get in on that first 10,000 applications.

Should I wait for this offer?

If you are able to get into the market now, I wouldn’t hesitate. Taking advantage of the historically low interest rates and buyers market we are in now, there are some great deals to be had, and capital gains to be made. If you’re not quite there, I would suggest putting together a plan over the next 6 months to be ready for when the offer hits.

Hello Home Property and our partners will be able to assist you with planning and all the paperwork for the application when the time comes if you are looking to purchase a new home or build. If you would like some advice to find the right property for your budget leading up to this initiative, please get in touch below.

The Top 15 Land Estates Currently Selling on the Sunshine Coast

The best land on the Sunshine Coast you can buy right now under $350,000.

Land on the Sunshine Coast is hot property at the moment.

We have hassled the land agents of the top 15 estates on the Sunshine Coast to get you all details of the some of the best blocks across the region. All have options below $350k

Note: We have no affiliation with any of these land developments, however we are happy to assist you in putting your dream house and land package together in that estate. That’s what we do.

Click below to jump to your desired location


NORTHERN
SUNSHINE COAST


MID
SUNSHINE COAST


SOUTHERN
SUNSHINE COAST

 

NORTHERN SUNSHINE COAST

Greenwood Grove Estate – Cooroy

Location:  2 Wilkinsons Court, Cooroy QLD 4563.

No. of Lots Available: 5+

Price Range: $295,500 – $330,500

Lot Size: 601sqm – 889sqm

Key Features: Large level lots, ready to build, 500m to Cooroy Township, hot property. Within 25 minutes of Noosa Main Beach, rural lifestyle yet close to the amenity and growing township of Cooroy.

Website: https://greenwoodgrove.com.au/

Full Package?: See yourself in a riverside 4 bedroom home from $550,000+

NORTHERN SUNSHINE COAST

ERINDALE PARK, COOROY

Location:  Blue Wren Place, Cooroy QLD 4563.

No. of Lots Available: 3+

Price Range: From $309,000

Lot Size: 616sqm – 880sqm

Key Features: Similar to Greenwood Grove, large, level, flat lots with all services connected.  10 minute walk to Cooroy township, large parklands and waterway nearby. The best (and only) estate within walking distance to the Copperhead Brewery.

Website: https://www.realestate.com.au/sold/property-residential+land-qld-cooroy-201777642

Full Package?: We can put together house and land packages on your behalf from $550,000

NORTHERN SUNSHINE COAST

45 BREWERS ROAD, COORAN

Location:  45 Brewers Road, Cooran, 4569

No. of Lots Available: ~1-2?

Price Range: From $225,000

Lot Size: 1500sqm+

Key Features: Out a bit further in Cooran, these very large blocks have a little bit of slope, which may add expense to the build, but have a great outlook across the landscape to Mount Cooran. All services, power, water, telephone and NBN are connected.

Website: https://www.realestate.com.au/property-residential+land-qld-cooran-201565986

Full Package?: We can put together house and land packages on your behalf from $500,000

NORTHERN SUNSHINE COAST

BURRELL ESTATE, EUMUNDI

Location:  Burrell Avenue, Eumundi

No. of Lots Available: 2 – 4

Price Range: From $275,000

Lot Size: From 884sqm to 1323sqm

Key Features: Titled land, with all services connected, a short walk into the historic Eumundi township. No other land estates in Eumundi that I know of, so very rare land that may not be available for long.

Website: https://www.realestate.com.au/property-residential+land-qld-eumundi-201552254

Full Package?: 4 bedroom, 2 bathroom house and land packages available from $530,000+

NORTHERN SUNSHINE COAST

MAROOCHY RIVERS, YANDINA

Location: Old Gympie Road, Yandina

No. of Lots Available: 10+

Price Range: From $250,000+

Lot Size: From 600 – 800+sqm’s

Key Features: Prominent SEQ developer QM Properties have created a spacious estate out at Yandina. Well-priced, large and relatively flat lots, with all services connected.

Website: https://www.qm.com.au/listings/maroochy-rivers/yandina-20694955/

Full Package?: Build your 4 bed, 2 bath and double garage home here from $520,000

NORTHERN SUNSHINE COAST

Lacy’s View Estate, Yandina

Location: Lacey Lane, Yandina

No. of Lots Available: ~5

Price Range: From $235,000+

Lot Size: From 366 – 700sqm

Key Features: Smaller lots, closer to the Yandina town centre, at a slightly more affordable price point. Most lots have sold, and the estate is nearing registration. Affordable, rural location only 15 minutes to Coolum beach. They also have a picture of a dog as their profile picture, which adds points in my books.

Website: www.lacysview.com.au

Full Package?: Get into a 4 bedroom 2 bath 2 garage house and land packages on your behalf from $500,000.

MID SUNSHINE COAST

Windsor Valley, Nambour

Location: 178 Windsor Road, Nambour.

No. of Lots Available: ~10

Price Range: From $226,000+

Lot Size: From 611 – 2134sqm

Key Features: I haven’t yet visited this estate, but the birdseye view is impressive. Some flat lots, some with views, all over 600sqm. A short drive to Nambour, and about 20 minutes to that morning beach swim.

Website: https://www.realestate.com.au/property-residential%20land-qld-nambour-201507482

Full Package?: We can put together house and land packages on your behalf from $500,000, and you won’t pay any stamp duty if the land is under $250,000.

MID SUNSHINE COAST

Butterfly Chase, Nambour

Location: 56 Image Flat Road, Nambour.

No. of Lots Available: 5 – 9

Price Range: From ~$260,000+

Lot Size: From 600 – 878sqm

Key Features: Lush estate, slightly to the north of Nambour. Nambour seems to be shaking off its less than salubrious reputation of the past and has become a hub of activity and investment within the property sector. Good buying here.

Website:  https://www.realestate.com.au/property-residential%20land-qld-nambour-202150678

Full Package?: Spacious 4 bedroom, 2 bathroom house and land packages on your behalf from $510,000+

MID SUNSHINE COAST

Park Lakes 2, Bli Bli

Location: 2 Agnes Place, Bli Bli

No. of Lots Available: 10+

Price Range: From $299,000+

Lot Size: From 354 – 790sqm

Key Features: The Final Release of one of our favourite estates on the Coast, Park Lakes 2 in Bli Bli is here. It has been some of the most in-demand land on the Sunshine Coast. With an average lot size of 600sqm’s, it is thoughtfully set-out, has great amenities with parks and walkways, and an excellent local cafe. 10 minutes to Mudjimba beach for your morning swim.

Website: https://parklakes2.com.au/

Full Package?: Secure on of the final remaining blocks and place your dream home on their starting from $550,000.

MID SUNSHINE COAST

Paynter Park, Woombye

Location: Paynter Park Drive, Woombye

No. of Lots Available: 8+

Price Range: From $279,000+

Lot Size: Avg. Lot Size 740sqm

Key Features: Due for completion in November this year, this new estate will be only 600m from Woombye Village and 400m from Woombye Train Station. You wouldn’t even need a car. Hah, no you will, but there is a lot of convenience nearby. Large open lots, many of them flat, and within 15 minutes of the beach, the Sunshine Plaza, and some excellent schools. This will be a highly sought after release.

Website:  https://paynterpark.com.au/

Full Package?: Become a Woombye local with a house and land packages from $530,000+

MID SUNSHINE COAST

BUDERIM FOREST, FOREST GLEN

Location: Owen Creek Road, Forest Glen, QLD, 4556

No. of Lots Available: 10+

Price Range: Starting at $335k

Lot Size: 195sqm to 375 sqm, avg ~250sqm.

Key Features: With site works scheduled to commence later this month (May 19), these blocks won’t be registered until probably this time next year. Nevertheless, you are able to secure a house and land package now. This is one of the best located new estates of size the Sunshine Coast has seen in a long time, with over 90 lots over the course of 6 stages. You are quick trip up the hill to all that Buderim has to offer, 15 minutes from the beach, 10 minutes from the Uni and 15 minutes from the Sunshine Plaza and the new CBD development. It is a beautiful leafy area, with the mighty Kunara Organic Marketplace a 5 minute walk down the road. What’s the catch? It’s expensive.

Website:  http://www.buderimforest.com.au/

Full Package?: There are 3 bedroom terrace options available from a bit over the $500k mark.  4 bedroom 2 bathroom house and land from $550k+

MID SUNSHINE COAST

HABITAT PALMWOODS, PALMWOODS

Location: Abbotts Road, Palmwoods, QLD, 4555

No. of Lots Available: 10+

Price Range: $300k – $350k

Lot Size: Avg size of ~550sqm

Key Features: Palmwoods is a great area on the Sunshine Coast, cute, leafy and serene yet close to all the action. The local pizzeria “Pizza Pizza” is one of the best on the coast. This estate has medium size blocks, well-retained and ready to build. A good option if you don’t want to be in the hustle and bustle of the larger Southern estates, yet still within 15 minutes of the beach.

Website: https://century21noosa.com/423494/lots-1-64-50-abbotts-road-habitat-palmwoods-palmwoods

Full Package?: With our builder panel we can create 4 bedroom house and land packages within this estate for within $560k.

MID SUNSHINE COAST

HARMONY, PALM VIEW

Location: Harmony Boulevard, Palmview, QLD, 4553

No. of Lots Available: 10+

Price Range: $228 – $350k

Lot Size: Between 250 – 450sqm

Key Features: To my knowledge, Harmony is the 2nd largest, actively selling, master planned community on the Sunshine Coast. It is superbly located a short drive from Mooloolaba beach, the University of the Sunshine Coast, and the new Hospital. They are building a number of roads to and from the estate at the moment, which once complete will make it a highly accessible and a good option for young families and first home buyers.

Website: https://www.harmonyliving.com.au

Full Package?: There are a number of terrace / townhouse options available. 3 Bedroom House and Land packages ranging from $420k+ and 4 Bedroom H&L packages ranging from $475k+.

SOUTHERN SUNSHINE COAST

AURA, CALOUNDRA WEST

Location: 1 Lukin Terrace, Baringa Dr, QLD 4551

No. of Lots Available: 15+

Price Range: $170 – $400k

Lot Size: Between 100 – 750sqm. Currently (May 19) a 350sqm block will set you back $241,000, and a corner 591sqm block, 299,000.

Key Features: Aura. Is. Huge. Well it is going to be. A jewel in Stockland’s portfolio, the Aura will comprise of 20 schools and other learning centres, a 90 hectare city centre with cinemas, retail, and dining, 3 supermarkets within 12 other shopping precincts, a sports stadium and multiple recreation areas, 2 large scale business parks, all neighbouring a 400 hectare conservation zone. The lots seem to be getting smaller, and the pricing higher, but there is no doubt the estate has an energy about it. Well worth exploring if you are looking for your first home on the Sunshine Coast.

Website: https://www.stockland.com.au/residential/qld/aura

Full Package?: 2 bedroom New York lofts in the late $300k’s, plenty of townhouse options in the early $400k’s, and house and land packages for a 4 bedroom home starting from the late $400’s.

SOUTHERN SUNSHINE COAST

PATHWAYS ESTATE, LANDSBOROUGH

Location: Bunderra Place, Landsborough

No. of Lots Available: 4

Price Range: $245 – $330k

Lot Size: Between 700 – 1200sqm.

Key Features: Only 5 lots remaining in the last release of this large block land estate in Landsborough. Well a mix of sloping and flatter blocks, this is one of the few estates where you can construct not only a larger single story home, but have space for the backyard cricket pitch and a pool. With the train line nearby, access to Brisbane is very quick. Speaking with the agent these blocks may not be around for too much longer, so act quickly on these.

Website: http://www.pathwayslandsborough.com.au/

Full Package?: House and land options on these larger blocks for $550k+.

Hello Home works with first home buyers (or any buyers), to make building or buying a new home easy.

We assist with finding the right property for you, negotiating with the land owners, and working with Queensland’s best builders to create a design you will love. From there we take care of your legal costs of purchasing the land, and manage the build through to its completion. We are your advocate every step of the way.

If you would like to have a chat about getting into the market, even if you don’t have too much saved, get in touch with us today.


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