Government Grants Loans for First Time Home Buyers

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					                                   January/ February 20 0 9                     ne WSLe T T er

                                 If ever there was such potential for the property
                                 market, it's now! With falling interest rates, generous
                                                                                                                     Home Buyers
                                 first home owner grants, deposit saver incentives,
                                 strong demand coming off the back of a general                                      Come First
                                 decline in property values, conditions appear
                                 stacked in favour of the buyer.

                                 We begin our newsletter with details of the $14,000                                 spreading
                                 upfront injection the Federal Government has made                                   eConomiC Cheer
       robert Knight             into the First Home buyers market. When combined
                                 with existing state government grants, it marks a
                                 significant increase to a deposit for a first home.
The First Home buyer boost is part of a broader economic stimulus strategy, which
                                                                                                                     Funding Boost
we cover in the articles ‘Spreading economic Cheer’ and ‘non banks Funding boost’
on pages 2 & 3.

We follow this up with an article on the pressures of lending money to family and
how to protect yourself emotionally and financially.
                                                                                                                      For Love
                                                                                                                      or money
enjoy this newsletter and feel free to share it with family and friends.

         Home Buyers Come First
starting the new Year in a new home                to be built around australia over the next
has become a happy reality for many                12 months.
australians, thanks to the Federal
                                                   The good news for first home owners
Government’s First home Buyer Boost.
                                                   doesn’t stop there, as the grant runs
effective from october 2008, the First             on top of the government’s first home
home owner Grant has now been doubled              saver initiative (a special-purpose savings
to $14,000 for first home owners who               account to which the government makes
purchase an established home. For those            contributions), plus first home owner
who build a new home or buy a newly                grants that are administered by each state
constructed home, there has been a                 (see ‘Did You know’ box on page 3). stamp
tripling of the existing grant, taking it to a     duty concessions are also available, many
whopping $21,000.                                  of which have undergone changes over
                                                   the last year to encourage home buyers
The boost was announced as part of a
                                                   into the market.
package to stimulate housing activity,
which is considered essential to the               as your mortgage broker we can make
economy’s overall performance. The                 sense of all these rebates, so give us a call
housing industry association predicts the          to make sure you are taking advantage of
move will result in an extra 15,000 houses         all your entitlements.

                                   We’re a member of the Mortgage & Finance association of australia (MFaa), the peak professional body.
                                   as a member, we adhere to the industry Code of Practice which requires high standards, fair business practices,
                                   ethical behaviour and compliance with the letter and the spirit of relevant laws and regulations - all in the interest
                                   of you, the borrower.
if a strong economy was on              December also saw the first                          For the family, $3.9-billion worth of
your Christmas wish list,               improvement in housing affordability                 support has been made available,
let’s hope the recent Federal           since early 2007. The real estate                    with around 3.9 million children
government’s economic stimulus          institute of australia housing                       receiving a $1,000 one-off benefit in
package does its work.                  affordability report released on                     the weeks leading up to Christmas.
                                                                                             recipients of Family Tax Benefit
Designed to provide practical           1 December showed the percentage
                                                                                             Part a, Youth allowance, abstudy
support for pensioners, families and    of household income required to
                                                                                             or the Veteran Children’s education
first home buyers, the $10.4 billion    meet loan repayments decreased
                                                                                             scheme were also eligible.
package is also expected to boost       by 0.7 per cent over the third
growth in the domestic economy.         quarter to 38.8 per cent.                            The government also targeted
                                                                                             spending on infrastructure, jobs and
money needs to be changing hands        it seems the government’s spending                   training. a total of $187 million will
to keep the economy alive, which        plan coupled with the reserve Bank’s                 be spent to create an extra 56,000
makes strong consumer spending          big cuts in interest rates finally gave              training places this financial year.
an important defence for countering     us news we could smile about!                        The productivity places program will
the global economic crisis.                                                                  be effectively doubled from 57,000
                                        Pensioners were among
The release of the Federal              the key beneficiaries of the                         to 113,000, taking the government’s
Government’s stimulus package           government handout, with a                           investment in training places since
in mid-october prompted an                                                                   april to more than $400 million.
                                        $4-billion down payment set aside
immediate increase in consumer                                                               a second economic stimulus package
                                        for long term pension reform. During
confidence. The Westpac and                                                                  has been hinted at for the middle
                                        December single pensioners received
melbourne institute consumer                                                                 of the year, but is only expected if
                                        a lump sum payment of $1,400, while
sentiment survey for november                                                                the global financial crisis worsens.
                                        pensioner couples received $2,100.
showed a 4.3 per cent rise in the                                                            While reserve Bank governor Glenn
index to 85.5, up from 82 in october.   First home buyers also came out on                   stevens acknowledges the situation
The number of people planning to        top, with a $1.5 billion investment to               is serious, he says the economy's
buy a home rose by 21 per cent, to      help australians gain their first keys               long-term prospects belie some of
its highest level since march 2006.     to a new home (see page 1 article).                  the gloomy talk that is around.

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               JanUarY/FeBrUarY 20 09              ne WsLe T Ter
  Did you know?
   Depending on which state you live in, you could be entitled to up to $29,000 in government rebates when you buy
   your first home. Check out the table below to find out how much you could receive in combined federal and state
   First home Buyer grants (this includes the recent Federal Government’s First home owner Boost).

       state           established home       newly constructed home                   on top of this, you may also
                                                                                       be entitled to a number of
       nsW             $14,000                $24,000
                                                                                       stamp duty concessions.
       viC             $17,000                $26,000 - $29,000                        Contact us for assistance
       QLd             $14,000                $21,000                                  with finding out what
       aCt             $14,000                $21,000                                  rebates and concessions you
       Wa              $14,000                $21,000                                  are eligible for, as well as a
       sa              $18,000                $25,000                                  helping hand in completing
                                                                                       the paperwork.
       nt              $14,000                $21,000
       tas             $14,000                $21,000

a recent government injection             bank sector has been hit hard, with
                                                                                    Confidence in the non-bank sector
of $8 billion into the mortgage           rmBs now being issued at a rate           has now returned, with a recent
market has strengthened the               of around $830 million a month,           mortgage Business poll showing that
position of non-bank lenders.             compared with $6 billion a month          50 per cent of brokers are now more
                                          before the crisis. This has weakened      open to using non-bank products
For you and i this means                  the capacity of mortgage lenders          compared to 12 months ago.
improved competition and the              reliant on the primary rmBs market        non-bank lenders have an important
promise of more choice in home            as a source of funding to compete.        place in the mortgage market
loan rates and products.                  The purchase of rmBs by the               because they have increased the
The Treasurer has announced that          government will level the playing         choice available to borrowers. Before
the australian office of Financial        field and ensure that non-bank            they came on the scene, the four big
management will purchase australian       lenders now have access to                banks called the shots when it came
residential mortgage-backed securities    funding for their operations.             to home loan rates and products.
(rmBs) as part of the government’s        For the government it means               our role as your mortgage broker
commitment to ease credit shortages       exchanging cash on their balance sheet    is to work with a large panel of
in the non-banking credit market.         for new prime aaa rated securities. in    lenders to find a loan that best suits
This is a type of security whose cash     other words, the government will own      your needs. as non-bank lenders
flow comes from residential debt          mortgages and give a return to the        recover their position to once more
such as mortgages, home-equity            taxpayer. The securities will be held     compete effectively with banks, we
loans and subprime mortgages. This        by the aoFm until market conditions       should in time see a flow-through
key source of funds for the non-          normalise and they can be sold.           in savings for home buyers.

                                                        JanUarY/FeBrUarY 20 09            ne WsLe T Ter
For Love
or Money
steve Willey had run his own cafe                               their own way, as well
for a number of years when he                                   as to experience the full
started having trouble paying the                               consequences of their
bills. he asked his parents, Jan and                            actions. There is no guilt
michael, to sign a mortgage over                                or shame in promoting the
their family home to provide him                                merits of hard work and patience when
with a bank overdraft. Within a year                            it comes to achieving monetary goals.
steve’s business had gone under

                                                                if you decide there is no other option
and the bank sold the parent’s
                                                                but to lend to family, here are some
home to recoup their investment.
                                                                tips to help protect yourself.
already in their retirement, Jan
                                                                •	 Explore	all	other	avenues	before	        The aim of Integrity Innovative Loan Solutions is the provision
and michael found themselves
                                                                   agreeing to lend money. Be cautious      of a competent, professional and efficient customer service
forced out of a home that held
                                                                   and look at the pros and cons            delivered with integrity to clients. We deal with over 40
a lifetime of memories. They felt
                                                                   of different lending options.            Lenders. Integrity Innovative Loan Solutions is a full member
angry and let down, while steve
                                                                                                            of Mortgage & Finance Association of Australia and Credit
felt humiliated at what he had done                             •	 Don’t	lend	what	you	can’t	afford	        Ombudsman Service Limited.
to the family. The once trusting                                   to lose. ask yourself whether you
relationship between parents and                                   would be comfortable giving              Clients deal with a highly experienced and qualified
son was never the same again.                                      the loan money away as a gift.           consultant who has the flexibility of visiting at work or home.
                                                                   if the answer is no, then you are        The company principal, Robert Knight, has worked in the
Unfortunately this is an all too
                                                                   not in a position to loan it.            finance industry for 25 years, having held senior management
common scenario that occurs when
                                                                                                            roles with Connect Credit Union and AMP Banking.
lending money to family. When                                   •	 Be	aware	of	all	the	risks.	Go	into	
money goes down the tube and                                       the loan with your eyes open,            Robert has formal qualifications in Business (Accounting),
people suffer financial consequences,                              knowing what the consequences            Applied Science (Building & Architectural Practice), Mortgage
relationships invariably turn sour.                                could be for you down the track.         Lending and Mortgage Broking.
While it’s natural instinct to want                             •	 Put	everything	in	writing.	              Robert has also owned a successful property development
to bail out your loved ones, there                                 seek legal advice and sign a             business and rental properties, as such is well attuned to the
are usually better ways to deal with                               formal loan document that                needs of small business and property investors.
financial difficulties. sometimes                                  spells out the terms of the deal,
love is about allowing others to find                                                                       Integrity Innovative Loan Solutions was established by Robert
                                                                   including a repayment plan.
                                                                                                            in July 2002.
                                                                                                            To ensure complete transparency in our transactions with
DISCLaIMer: This newsletter is intended to provide general news and information only.
readers should rely on their own enquiries before making any decisions touching their own interests.
                                                                                                            clients, Integrity Innovative Loan Solutions has voluntarily
Please do not rely on any part of this newsletter as a substitute for specific legal or financial advise.   adopted the Finance Brokers Contract, currently compulsory
                                                                                                            only in NSW and VIC. Through this process, clients are fully
                                                                                                            aware of remuneration paid.

                                                            Loan Solutions
                                                            GPO box 1809
                                                            Hobart TaS 7001                                    t          03 6223 4322

              With compliments
                                                                                                               f          03 6223 2203

                                                                                                             m            0438 233 324



Description: Government Grants Loans for First Time Home Buyers document sample