Month: August 2018

To Fix or Not?

Posted on by venrockfinance

A well-known industry comparison website “Canstar” has suggested that borrowers should consider switching their arrangements to fixed rate options, as the market has in all probability, reached record lows. (This recommendation was issued in late July 2018).

This recommendation also co -incides with a time when several banks have started offering fixed rate mortgages which are cheaper than their standard variable rate loans. Both Macquarie and Aussie Home Loans have recently dropped their fixed mortgage rates by 10 basis points, while increasing their variable rates by 5-10 basis points.

Whilst this option has various pro and cons, and is definitely not for everybody, Venrock believes all borrowers should undertake a review to see if this option suits the borrowers circumstances.

If a fixed rate option is something that you would like to consider, talk to one of our brokers for a free review or a Mortgage Health Check.

Financial Focus : Purchasing your first home

Posted on by venrockfinance

Planning to take your first step into the world of property? The entire industry can be extremely complex and confusing for newcomers – and being such a big commitment, it pays to get it right the first time. To help you get started in buying your first property, here are the resources and processes you will need to purchase your first home in Western Australia.

HOW MUCH CAN YOU AFFORD

Before you go off looking for a home, you need to find out how much you can borrow first. This will differ from lender to lender, and will be influenced by your personal circumstances – from your income to how much you can put down on a deposit.  Typically, you’ll need around 10 to 20 per cent of the value of your home for use as a deposit. A lower deposit might mean that you have to take out lender’s mortgage insurance, designed to protect the lender. To determine how much you can borrow contact Venrock and one of our friendly brokers can prepare a borrowing capacity for your individual circumstances.

WA FIRST HOME OWNERS GRANT

As a first home buyer, you are in a unique position in the property market, as you have access to a number of assistance programmes. Firstly, there is the WA first home owner grant (FHOG), which provides up to $10,000 to eligible people purchasing a new home. A ‘new’ home is a property that has never been lived in before by any other party, or sold to another party prior to you. To be eligible for the FHOG, you must be an Australian citizen or permanent resident, and above the age of 18. Additionally, you cannot have owned a home prior to to the 1 July, 2000. The total value of the new home must not exceed the cap amount. The cap amount is $750,000 if the property is located south of the 26th parallel (south of Shark Bay)  and $1,000,000 if the property located north of the 26th parallel.

STAMP DUTY IN WA

Stamp duty is a tax levied by the Western Australia government, based on the value of the house or land that you are buying. However, as a first home owner, you could be entitled for a reduced rate of transfer duty, especially if you qualify for the FHOG. In summary

  • If the new or established house purchase price is under $430,000 there is no stamp duty applicable.
  • If the value of the vacant land does not exceed $300,000 there is no stamp duty applicable.

HOME BUYERS ASSISTANCE

First home buyers looking to purchase an established property can still apply for the Home Buyers Assistance Account. This provides up to $2,000 for incidental costs associated with buying a property, such as inspection fees, mortgage insurance premiums, and so on. It is available from the Department of Commerce and Venrock Finance can assist in applying for this grant.