To all the first home buyers out there in our private group. I’m Rick Nieuwenhoven. Some of you may have seen me at some of our events, and if you haven’t been to one of our events, you’re more than welcome to come along. We don’t charge, and it’s free information. We’ve had some questions about the first homeowner grant, so I thought I’d just share a little micro podcast with you guys to talk about it quickly.
The First Home Owners Grant is issued by Revenue SA, part of the government, of course, and it applies to new builds only. We do get people getting a little bit aggravated at times that it’s only new builds, and getting confused and don’t understand why it’s not on existing properties. I don’t have the exact answer, I’m not in the government, but I could assume that the government wants to provide an incentive to purchasers to buy new property because it’s a greater stimulus to the economy, compared to existing property.
Therefore, we can only deal with what we’ve got, so for those of you that are willing to look at new property, that’s a great advantage because that’s $15,000 that you can use to put in your pocket, to go towards equity in your house or covering the costs of purchasing, anything along those lines. It goes up to a property value of $575,000 so those higher income earners looking at higher-end suburbs, you might need to keep that into perspective when you’re looking at what property you do purchase as well, and we do need to be an Australian resident for eligibility for this grant.
The other part that ties in with this that’s quite common as well, is if we’re looking at HomeStart as a loan provider to get us into this first homeowners market, people ask us about their Graduate Loan. It is a Graduate Loan, but it’s a graduate of Certificate III, so you don’t have to go to university, you don’t even have to go to advanced diploma in TAFE, it’s a Certificate III.
Therefore, if you haven’t got a Certificate III and we’re going to look at HomeStart as a potential option, I wouldn’t stress too heavily. There are options available for you in relation to Certificate IIIs that are quick and easy to attain, so it just may be that you need to look at that option, just to get that qualification. The main difference with it, getting that qualification allows us to get a loan at a loan to value ratio of 97%.
The other thing is, sometimes we don’t hear about people talking about loan to value ratios often, and they don’t understand what it is, it’s also got an acronym of LVR, makes sense, Loan to Value Ratio. What that means is if we’re looking at a $400,000 house, and we’ve got a $20,000 deposit, that’s a 5% deposit, which would mean there would be an LVR for this purchase of 95%.
Now, what that means is HomeStart is willing to go, with the graduate loan, to 97%, which is a good win for us, that means less deposit. If I’m thinking on the fly, that’s going to be $12,000 for a $400,000 loan. There’s a lot of other idiosyncrasies that go into that, but I think that’s pretty much a good snapshot for you of the First Home Buyers Grant and also the qualification criteria for the HomeStart Graduate Loan.
If you’d like to hear more about our full course, hop online, post up a message, or ask a question, and we can share the dates with you of when the next seminars are coming up, and look forward to sharing some more podcast content with you very soon.