Newsletter Articles

Getting out of the “Rent Trap”

With the costs to buy property seemingly spiraling out of control, many people who are renting their homes must be wondering how they can ever afford to buy a home of their own. 6 Point Finance has some good news. There are a variety of very good home loan products available to assist people to beat the rent trap.

To illustrate some loan options we are using the exampe of a recently married couple that are interested in purchasing their first home to the value of $300,000. They are eligible for the First Home Owners Grant (FHOG). Their options for finance include -

 

1. 106% (borrow 100% of the purchase price plus associated costs)

- Applicant/s must earn in excess of $80Kpa either individually or jointly with partner
- Employment stability is vital – no probations, minimum of 6mths with current employer
- No Lenders Mortgage Insurance (LMI) payable
- No deposit / Genuine Savings required
- You keep the First Home Owners Grant (FHOG)
- Current Market Interest Rate Range 7.95% - 10.05%


2. 100% (borrow the full purchase price and pay for associated costs yourself)

- designed for borrowers who have not saved enough money for a deposit
- Employment stability – no probations, minimum of 6mths with current employer
- No genuine savings required
- Use the First Home Owners Grant towards transaction costs*
- Current Market Interest Rate Range 7.35% - 8.80%


3. 97 / 3 (borrow 97% of the purchase price, have 3% in genuine savings and pay for associated costs yourself)

- designed for borrowers who have some genuine savings to put towards their loan
- Lenders Mortgage Insurance is applicable
- Your 3% deposit needs to be money that you have progressively saved over a period of several months (as opposed to a gift).
- Current Market Interest Rate Range 7.42% - 7.80%


4. 90 / 10 (borrow up to 90% of the purchase price and have a 10% deposit)

- Deposit can be genuine savings, a gift, FHOG, a personal loan
- Lenders Mortgage Insurance is applicable
- Current Market Interest Rate Range 7.45% - 7.75%


5. 80 / 20 (borrow up to 80% of the purchase price and have a 20% deposit)

- Deposit can be genuine savings, a gift, FHOG, a personal loan
- FHOG can be used towards the deposit for the loan
- Lenders Mortgage Insurance is NOT applicable to this product
- Vast array of loans available
- Current Market Interest Rate Range 7.35% - 7.75%

 

 

STAMP DUTY CHANGES

Due to recent increases in property prices, there has been a few changes made to the Stamp Duty Concessions as of 01/01/07 including an increase in the threshold amount for First Home Buyers from $250,000 to $320,000, this means that you are now exempt from having to pay Stamp Duty for up to $320,000 of the total Purchase Price of the property.

Talk to your Finance Specialist about any of the above products and
how we can assist you in obtaining the $7,000 First Home Owners Grant.

Please note that the information supplied in this article has been sourced based on current market information. 6- Point Finance makes no warranties or representations in relation to the accuracy of the information provided by these sources.