The First Home Owner Grant is a lump sum of cash available to first home owners to help with the cost of buying a first home or vacant land to build a home on. It is a national scheme funded by the Federal Government, but administered through each state or territory Revenue Office. The Grant doesn’t have to be repaid, and it’s not taxable, but there are terms and conditions which have to be met. Since it is funded by state governments, different amounts are available in each state and territory. The exact amount of grant depends on where you are buying the house. For instance, in regional Victoria, the FHOG is worth $20,000.The amount can range anywhere between $7,000 up to $26,000 and differs from state to state.

To find out more information on FHOG eligibility for each state – Click here.

Though the rules for the First Home Owner Grant differ slightly from state to state but some basic conditions which apply are:

• You must be a permanent resident or an Australian citizen. 
• You must be purchasing the first home you or your spouse have owned or co-owned in Australia and should not have received an Australian First Home Owner Grant in the past.
• You must be buying a home to live in – not as an investment property
• You must also move into the property within 12 months, and live there for at least six continuous months.
• You must be a natural person (not a company or a trust), and
• You need to be aged over 18.

The other conditions which may apply depending on your state/territory are:

• In many states, the First Home Owner Grant is only available if you buy or build a new home. 
• In some states, you may not be eligible for the FHOG if you pay over a certain value for your first home.

As each state has its own set of rules for the First Home Owner Grant, it is important to understand the guidelines that apply for your area.

At Nfinity Financials, our brokers have an extensive knowledge about the bank policies and products and can help you find which of the numerous home loan products will be best suited to your specific needs.
Our loan experts will suggest an optimal and strategic structure for your home loan so that you get the perfect home loan for your unique circumstances.

If you’re buying a property with someone else you can still get the first home owner grant, providing all the co-purchasers are eligible to receive it.

Stamp duty is a tax levied by all Australian states and territories when a property is purchased. The stamp duty to be paid depends on various factors like the property purchase price, location of the property and loan purpose (owner occupied or investment). Some states charge different rates if you buy investment property or if you buy an owner occupied property.

If you want to get an idea of the stamp duty you need to pay – click here

The interest calculation is determined by the lender bank and the loan contract.Typically, the interest cost of a loan is calculated daily on the outstanding balance.
For instance: daily interest on a $500,000 loan with a standard variable rate of 4% p.a.will be 54.79 ($500,000 x 4%) ÷ 365
To find out more about loan repayments click here

The P&I (Principal and interest) repayments mean that you pay a portion of the loan balance in addition to the interest charged over the agreed period.
You essentially pay back the loan over the term of the mortgage. Your repayments also include part of the loan and part of the interest on the loan.
Interest only is when you’re paying the interest on the balance with no principal over an agreed period.

Some loan products give you the flexibility to make additional payments on your mortgage, over and above the amount that you are required to pay which means that there may be additional money in your loan account that you can redraw from your mortgage if you require.
This facility will depend on the lender and their loan product as each lender might differ in their redraw policy.

An offset account is a transaction account which is linked to the loan account, and any amount which is kept in this account ‘offsets’ or reduces the amount of interest payable on your loan. This means that just by having extra cash in your offset account can help you in reducing your interest and thereby can help you pay off your home loan more quickly.

If you make additional payments in your home loan account over and above the minimum repayment amount in order to reduce the interest, the amount goes into ‘redraw’. These extra payments done by you can be accessed or drawn by you at any time depending on your lender bank. However, if you access those extra funds, the balance of your mortgage and the interest payable shall be affected. This is subject to the policy of the lender bank.
On the contrary, if you have an offset account, the additional payments are held in a separate transaction account called offset account and the balance of the loan does not reduce but you still get interest reductions which helps you to pay off your home loan faster.

A line of credit is a flexible loan allowing you to draw down and repay smaller or larger sums at any time up to an approved limit. These loans have an agreed term and repayments are interest only, based on the amount you have drawn down at the time.

Lenders Mortgage Insurance is insurance you’ll pay to the lender if you borrow more that 80% of the value of your property.
It’s the insurance the lender takes out for the mortgage to protect itself, but it also allows the borrower to get into the market with a smaller deposit.
The bigger the deposit you have, the less your lenders mortgage insurance will be.
Depending on the loan type and amount, some lenders will allow you to add the cost of this insurance onto the loan so that you don’t have to find the money upfront to pay for it.

Every buyer should have a solicitor or conveyancer. Once you’ve found a property, the agent should send the contract of sale to your solicitor or conveyancer for review.
They will also help with the settlement process and exchange of title documents.

Settlement time varies with every sale individually, however, four to eight weeks is normal.
The settlement period is negotiated between buyer/seller and can be affected by the lender’s and buyer’s ability to complete the requirements prior to settlement.

A strata report is applicable when you are buying a unit, town house or when there’s a common property managed by a strata scheme.
It usually gives you the following information:

• Whether or not the strata scheme is adequately insured
• Any regular or special levies
• What renovations and maintenance have been completed
• Any evidence of potentially expensive building or structural problems that need fixing
• Whether or not the strata scheme has an adequate reserve of funds
• Evidence of how well owners work together to maintain the property
• Any strata regulations relating to renovations, refurbishment or pet ownership

Contract of sale is a legal document between the seller (vendor) and buyer (purchaser) and includes the agreed sum for which property will be bought.
The contract of sale often includes: a sewage diagram, a copy of the certificate of title for the property, a zoning certificate from the local council and copies of documents relating to any other registered interests over the property.

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