What is the First Home Owners Grant?

Eligible First Home Buyers can receive $7000 regardless of their income, or the value of the home. This grant is tax-free.

Eligibility

To be considered eligible you must be buying or building your first home and meet the following criteria:

• Be a permanent resident or Australian citizen.
• Be at least 18 years of age.
• Have not owned a residential property, jointly, separately or with some other person, in any State or Territory of Australia before 1 July 2000. [Also applies to your spouse]
• Have not owned a residential property and occupied that property jointly, separately or with some other person in any State or Territory of Australia for a continuous period of at least six months, on or after 1 July 2000.
• Be entered into a contract for the purchase of a home or signed a contract to build a home on or after 1 July 2000.
• Have not previously received the First Home Owners Grant
• You or your spouse will occupy the home as your principal place of residence for a continuous period of six months, commencing within 12 months of settlement or construction of the home.

Applying for the grant

The application should be lodged with an approved agent - usually your bank or mortgage broker at the time of applying for finance or directly with your State's Revenue Office after settlement or completion of construction.

State Revenue Offices:

• New South Wales
• Victoria
• Australia Capital Territory
• Northern Territory
• Queensland
• Southern Australia
• Tasmania
• Western Australia

Online savings Account

Online savings accounts are offered by most banks and allow you to:

• Separate a portion on your money from your daily transaction account
• Earn a higher interest rate than your daily transaction account
• Only access your funds by transferring to your daily transaction account.

Save a deposit

Traditionally, you'll need a deposit of at least 20% to get a Home Loan. That is a deposit of $20 to borrow $80. If you're not sure where to find the cash to save a deposit consider preparing a budget.

• Govt savings account
• Finally, if you don't have a 20% deposit but want to buy a house now, you're still eligible for a mortgage. You will be asked to pay for Lenders Mortgage Insurance.

Lenders Mortgage Insurance

When taking out a mortgage with less than 20% deposit the borrower is required to purchase Lender's Mortgage Insurance to protect the Lender against default. It is a one-off charge that gets included in your loan amount, the smaller the deposit the higher the mortgage insurance premium payable.

Additional Costs

In addition to the cost of your home consider the costs of finding, buying and moving into your new home.

Finding

• Research costs
• Professional valuation
• Building inspections

Buying

• Mortgage fees
• Stamp duty
• Legal or conveyance costs

Moving In

• Moving costs and utility connections
• Home and contents insurance
• Council rates

Credit history

Credit history companies hold a record of all your past credit applications and any defaults on payment. To receive a free report of your credit file visit this link:

Veda Advantage

Prepare a budget

A quick budget is an easy way to answer the question: "Am I ready to buy a house?" Your budget can be as detailed or simple as you like. A simple budget is better than no budget, you can always refine it later.

A basic monthly budget can be done in 3 steps:

1. Calculate your Income - Salary, Bonus, Interest, etc.
2. Calculate your Expenses - Rent, Debt repayment, Utilities, Food, Transport, Entertainment, etc.
3. Subtract the Total Expenses from Total Income for your +Surplus/-Deficit every month.

A Surplus indicates that you may have some extra earnings to fund a mortgage.

A Deficit means you need to increase earnings or reduce spending before considering home ownership.

Savings Calculator

A savings calculator is a tool to help you reach your savings goals. Whether saving for a house, a car, or other special purchase, the savings calculator will help you determine the right amount to save on a regular basis to achieve your goal.

• ING
• CBA
• ANZ