With current Mortgage Rates being higher-than-average and many Australians being affected by the current ‘Cost of Living Crisis’, being able to navigate the household banking sector has become more important than ever. This is where a Mortgage Broker can provide value. By acting as an Intermediary between you and the banks, Mortgage Brokers can guide you through the process of purchasing a property and ensure you are minimising interest on your outstanding home loan debt.
At Accru we have a specialist Mortgage Broker, Jayden, who can assist you with purchasing a property, gaining pre-approval, refinancing and cashing out equity from your property.
Some key products/terms involved in Mortgage Broking include:
Conditional Pre-Approval:
Conditional Pre-Approval is an indication, but not an obligation from the lender that you’re eligible to purchase a property. You don’t need a specific property to apply and is generally free of charge and valid for ~90 days. By gaining pre-approval, it can show potential sellers that you’re serious about purchasing a property and gives you an idea of what you can afford. However, it is worth noting that multiple applications can make you seem like a riskier borrower and potentially lower your credit score.
Offset accounts:
An offset account is a transaction account that can be linked to your variable home-loan account, helping to lessen interest repayments on home loan debt. If your Offset account value matches the Home Loan value, you are fully offsetting the loan and avoiding paying any interest on repayments.
Redraw Facility:
Should you make additional repayments above your minimum home loan repayments, having a Redraw facility will allow you to access the additional payments. Although it is not an account but a feature of a loan, a redraw facility also offsets interest on your home loan. Note, if the redraw is used for an investment loan, the tax deductibility status may be lost.
Lender’s Mortgage Insurance (LMI):
Generally, if your loan amount is greater than 80% of the total property value, banks will take out insurance to protect themselves against you defaulting on your loan. This insurance is passed on to you in the form of an expensive one-off premium, hence, it is a last resort for home borrowers.
Some useful tips and tricks to consider when you have a mortgage include:
- Having an Offset account linked to your home loan to lessen any interest accumulating on the balance.
- Being proactive with contacting banks for the best possible rate – your mortgage broker can assist with this should you have one.
- Avoid having a Credit Card, especially if there are surcharges associated, or if you already have a Redraw facility linked to your home loan.
First Home Purchase
When you are looking to purchase your first home, there are a number of government concessions and grants you could be eligible for, including:
First Home Super Saver Scheme:
- This can allow you to withdraw personal voluntary contributions from superannuation to purchase your first home.
- Note, this is subject to a maximum contribution of $15,000 in any one financial year, and a maximum of $50,000.
- See below current eligibility requirements:
- You’re 18 years old or older when requesting a FHSS determination – your FHSS determination can include eligible contributions that were made before you turned 18.
- You’re a first home buyer, having never owned property in Australia – this includes an investment property, vacant land, commercial property, a lease of land, or a company title interest in land.
- Your name must be on the title of the property you buy.
- You don’t have a completed release request in relation to a FHSS determination made in relation to you.
- If you use the FHSS scheme to buy your first home, you must genuinely intend to occupy the property as a home as soon as practicable after purchase and do so for at least 6 of the first 12 months from when it is practicable to occupy it.
First Home Buyers Guarantee Scheme:
- This can allow you to borrow up to 95% of your property’s value.
- Note, Eligibility is subject to Income limits and a maximum property value dependant on your State.
- See below current eligibility requirements:
- Applying as an individual or two joint applicants
- An Australian citizen(s) or permanent resident(s) at the time they enter the loan
- At least 18 years of age
- Earning up to $125,000 for individuals or $200,000 for joint applicants, as shown on the Notice of Assessment (issued by the Australian Taxation Office)
- Intending to be owner-occupiers of the purchased property
- First home buyers or previous homeowners who haven’t owned or had an interest in a real property in Australia (this includes owning land only) in the past ten years.
First Homeowner Grant (FHOG) (Victoria):
- If you are buying or building a new home (never before sold, occupied or leased) for <$750,000 you may be eligible for a $10,000 grant.
- First Home Buyer Duty Exemption/Concession (Victoria):
- A one-off duty stamp duty exemption for a Principal Place of Residence (PPR) valued <$600,000.
- Or a concession for a PPR of dutiable value (Contract price or market value if paid less than market value) between $600,001 and $750,000.
- Note, you must have the property as your PPR for a continuous 12 months after settlement to retain the exemption or concession.
Looking to make informed financial decisions? Contact your local Accru office for expert guidance tailored to your goals.
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