First Home Buyers Grant Bonus extended
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First homebuyers will benefit from the extension of the increased First Home Buyer's Grant, which has been extended for six months. People who enter into contracts on or before September 30 will still be eligible for a grant of $14,000 for an existing dwelling and $21,000 for a new home. The more generous scheme will then been phased down, and end after December 31. Between October 1 and December 31, the boost will be halved, meaning first home buyers will receive a total of $10,500 for established homes and $14,000 for new homes. From "MONEY" Six more months for first home grant 12/05/2009 8:00:00 PM Those buying their first home have another six months to locate their dream dwelling and still benefit from last year's boost to the first home owners grant scheme. The first home owners grant was lifted from $7,000 to $14,000 for existing dwellings and to $21,000 for new homes as part of the $10.4 billion stimulus package unveiled by the government in October last year. The more generous scheme was set to expire on June 30 but has been extended due to the ongoing impact of the global financial crisis. But under changes announced in the budget on Tuesday night, people who enter into contracts on or before September 30 will still be eligible for a grant of $14,000 for an existing dwelling and $21,000 for a new home. The more generous scheme will then been phased down, and end after December 31. Between October 1 and December 31, the boost will be halved, meaning first home buyers will receive a total of $10,500 for established homes and $14,000 for new homes. Treasurer Wayne Swan said the first home owners boost had already helped 59,000 people achieve the great Australian dream. "In light of the continuing global uncertainty and the success of this initiative, tonight, I announce that we will extend the boost for a further six months, including three months at the full rate before stepping it down," he said in his budget speech. Data released this week showed first home buyers accounted for 27.3 per cent of all home loans approved in March. |
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Thinking About Buying Your First Home?
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Thinking about purchasing a home of your own? Keep these critical considerations in mind:
How long you plan to live in the home.
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.  The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn or a shorthage of housing stock, the length of the time to cover these costs could be shortened, and the opposite is also true.
How long the home will meet your needs.
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has the amenities that you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the garage or study be turned into a den and extra bedrooms? Could a master suite be added? Having an idea of what you'll need will help you find a home that will satisfy you for years to come. Your financial health - your credit and home affordability.
Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? Can you find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, lenders may still provide you with a loan, but you may just have to pay a higher interest rate and fees. Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money as the years go by? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it's within your comfort zone. To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator. Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the "28/36" rule applies, in today's home mortgage market, lenders are making loans customized to a particular person's situation. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we're not advocating you purchase a home utilizing the higher ratios, its important for you to know your options. Where the money for the transaction will come from.
Typically home buyers will need some money for a down payment and closing costs. If you are eligible for the First Home Buyers Grant this will provide a great deal of relief as to the amount of savings you have accumulated, and, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have 10-20% for a down payment, you will still appear to be a very good financial risk to a lender. The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs. If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.
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Inner suburbs now more affordable for some.
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Millionaires' row gets shorter as crisis decimates premium property 15/05/2009 3:00:00 PM By Stuart Fagg, ninemsn Money The number of suburbs across Australia where the average house price is more than $1 million has plummeted as the economic downturn hits the wealthy hard. According to analysis from RP Data, the global financial crisis has decimated the high-end property market as plunging equity markets and shrinking superannuation take their toll. RP Data senior research analyst Cameron Kusher said the number of million-dollar suburbs has fallen from 152 to 134 over the past 12 months. Prestigious boltholes like Willoughby on Sydney's North Shore, New Farm on Brisbane's waterfront and Melbourne’s South Yarra all slipped out of the million dollar club. The biggest drop was in Perth, where the median house price dropped 26.4 percent from $1.05 million last year, to $772,500 this year. Across the 151 suburbs which recorded a median house price of $1 million or greater during 2008, 106 suburbs or more than 70 per cent of these suburbs recorded a fall in median price during the year, Kusher said. High-profile residential locations have actually fallen out of the $1 million club during the last 12 months. The fall in top-end prices mirrors the overall trend. House prices across the nation have fallen by almost 7 percent in the last year, piling pain on cash-strapped families already nursing heavy losses on their superannuation funds. An Australian Bureau of Statistics survey showed homeowners in Perth were the hardest hit, with prices down over 10 percent after falling more than 3 percent in the final quarter. House prices in Sydney have dropped 7.3 percent in the year to the end of March, while Melbourne saw a 6.7 percent drop, Brisbane was down 6.3 percent and Adelaide slipped 2 percent. Meanwhile, house prices in Canberra suffered a 5 percent drop in value. Darwin and Hobart were the only major cities to record a rise in prices, up 10.8 percent and 0.6 percent respectively. Experts had expected house prices to remain flat over the March quarter as lower interest rates lured back first time buyers, providing a cushion for the market. However, prices tumbled an average of 2.2 percent in the December to March quarter. |
What will you spend extra money on when buying a house?
(A) Location
(B) Size
(C) Amenities
(D) Yard
(E) Age
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