6 little known facts that can help by Prudential Real Estate

6 Little Known Facts That Can Help

Little Known Facts That Can Help You

Buy Your First Home

6 Little Known Facts That Can Help

Our promise to you Since 1988 we have strived to provide the very best real estate service in Sydney to the many property buyers, sellers, investors and tenants who call on us for help and advice each week. This booklet and the advice it contains is part of that promise. We hope you enjoy the content and profit from the experience. Remember, our offices are open 7 days a week to help you with any real estate matter so be sure to call us if you think we can help. You'll find contact details for your nearest Prudential Real Estate office on the back page of this booklet.

6 Little Known Facts That Can Help

I bought my first home in 1985. I had a couple of thousand dollars saved up as my deposit and a chance to buy a fibro home in Merrylands West for $51,000. I needed $8000 (15% of the purchase price) as a deposit before I could exchange contracts. Fortunately, my parents came to the rescue by lending me a small amount to make up the balance of my deposit and John Symonds (of Aussie Home Loans fame) helped me arrange a loan with Newcastle Permanent Building Society. At the time I'd never heard of Newcastle Permanent Building Society but I never looked back. My overriding memory of that time was the stress and the drama involved in having to borrow $44,000. After all, the most I had ever borrowed before this was $5000 to buy a car â&#x20AC;&#x201C; $44,000 seemed to me to be a fortune and like every first-home buyer I was extremely anxious. If only I knew then what I know now. If you are a first-home buyer this SPECIAL REPORT will give you the practical advice that will put you one step in front of the rest. Good Luck â&#x20AC;&#x201C; Michael O'Sullivan

6 Little Known Facts That Can Help

Buy A Home With No Deposit

Hard to believe but true ! Despite everything you may have heard it is possible to buy a property with no deposit. Currently there are two lending institutions in Australia who will lend you money for your first home without the requirement of a standard 5% or 10% deposit - so long as you meet their basic criteria as set out below. Here's the details of the two home loans that each company offers ; HOME LOAN # 1 Ÿ

100% of the value of the property can be borrowed.

The loan is available for owneroccupier purchasers who do not c u r re n t l y ow n a ny re a l e st a te property.

Only 3% of the purchase price must be genuine savings, proven by bank statements over a six-month period. Grants and gifts can assist with covering fees.

The loan must be used to purchase established owner-occupied properties only.

Property must be located within the Sydney Metropolitan area only.

Maximum loan = $300,000 & Minimum loan = $110,000.

Loan term = 10 to 30 years.

Interest rate = Fixed 1 to 5 years or variable.

At least one of the loan applicants must have been in a current employment for a period not less than 12 months.

Application fee is only $499 includes one property valuation)

Additional terms and conditions apply

6 Little Known Facts That Can Help

or investment properties at least 12 months old, located in metropolitan areas of capital cities and major re g i o n a l c e n t re s . W h e re t h e property is a unit, the complex within which the unit is located, is limited to a maximum of 10 units. House & Land packages are unacceptable.

HOME LOAN # 2 Ÿ

Deposit can be borrowed, a gift or from 1st homeowners grant.

There is no requirement for the applicant to prove savings or savings record.

In the case of a gift (often a lump sum from Mum or Dad) a letter must be obtained from the provider of the gift confirming that the gift is not subject to repayment.

Where the deposit is borrowed funds, a copy of the lender's letter of offer, detailing the loan amount, term, interest rate and repayments must be provided. Where the deposit is borrowed funds from a credit card the details must be provided.

Maximum loan = $300,000 Metropolitan and $200,000 nonmetropolitan.

Principal and interest loan only.

The property to be purchased must be prime residential owner occupied

Applicants must be in their current employment for a period of 12 months and employed for a minimum of 24 months in the same or similar field.

One applicant must have an income of $45,000 (can include overtime, D S S p ay m e n t s a n d a n y o t h e r income)

No previous credit defaults.

Applicants must have at least 2 months repayments in the bank.

How do you get one of these loans - it's easy ! Simply call Craig Corbett from Choice Home Loans (more about Craig later in this SPECIAL REPORT) ON 4647 5999.

6 Little Known Facts That Can Help

Government Grants Can Make A Big Difference

W h e t h e r yo u a re c o n s i d e r i n g t h e purchase of a new or existing home, there a re s u b s t a n t i a l b e n e f i t s c u r re n t l y available from both the Federal and State Governments.

The First Home Builders Scheme mentioned above, has a cut-off date of 31 December 2001 so you may have to be quick to take advantage of the savings offered under this scheme.

a. If you are buying an existing home, and neither you nor any other purchaser in the transaction has b e e n g ra n t e d t h e F i r s t H o m e Owners Grant in the past, you can qualify for $7000.00.

In any case, these grants mean terrific savings off the purchase price of a home. So, next time you look at an advertisement for an existing home and the asking price is $185,000 you can take $7000 off and read the price as $178,000.

b. If you are buying a new home, and neither you nor any other purchaser in the transaction has been granted the First Home Owners Grant in the past, you can qualify for $14000.00. c. The NSW Government through their First Home Plus scheme provides exemptions or concessions on transfer stamp duty and mortgage duty for first homebuyers and builders in NSW. Under this scheme, a f i r s t h o m e b u ye r co u l d s ave thousands of dollars.

6 Little Known Facts That Can Help

Your Credit Rating Will Be Important

Buying your first home probably means applying for a very large home loan.

Alternatively, you may fax your request to them on 02 9951 7880

And applying for almost any loan in Australia means that your bank will probably want a copy of your credit history.

The details you need to send to Credit Advantage are:

Your personal credit history is stored in a database by a company called Credit Advantage (they have 11 million Australian consumer credit records). Your bank will request a copy of your personal credit history from Credit Advantage when you apply for a loan.

Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Your full name; Your date of birth; Your driver's licence number; Your current residential address Any previous residential addresses within the last five years; A daytime telephone number; and Your signature.

If your credit history has any blemishes your bank may not approve your home loan.

Credit Advantage says that it should take about 10 working days for your credit history to arrive in the mail.

So, what can you do ?

Once you receive your credit history check for anything that may make a lender look twice. If there is anything in your recent history that might cause a problem now is the time to fix it up before the bank receives your application for a home loan.

First you can apply to Credit Advantage for a copy of your credit history. This service is free. Here's what you do . . . To obtain a copy of your personal file free of charge, please post your details to: Credit Advantage Public Enquiry's PO Box 964 North Sydney NSW 2059.

6 Little Known Facts That Can Help

Get Pre-Approved For Your Home Loan

Remember the Boy Scouts motto "Be P re p a re d " . We l l n o t h i n g i s m o re important when you are preparing to buy your first home. Getting pre-approved means submitting an application for a home loan to your bank before you find a home to buy. Once you've satisfied all the requirements of your bank and your loan is approved you can relax and begin shopping for your perfect home. Getting pre-approved gives you enormous peace of mind at a time when most people are a bundle of nerves. Pre-approval also gives you a negotiating edge when it comes time to haggle over the price of a property - you'll be much more confident knowing exactly how much you can borrow. How do you get pre-approved ? These days the easiest, quickest and most e f f i c i e n t way to b o r row m o n ey to purchase a home is to talk to a mortgage company. Mortgage companies are like a middleman between you and the bank. They usually represent more than a dozen banks or lending institutions and make it much easier for you to compare one bank with another and one loan product with another.

One company that we deal with every day is Choice Home Loans. They arrange loans with 23 banks and lending institutions including Colonial, Westpac, ANZ, RAMS etc. Best of all their service is free - you pay them nothing. They will come to your home at a time that suits you, they will consider your personal circumstances and then provide a few recommendations - different banks and different loans. When you choose the loan that suits you, Choice Home Loans will handle all the paperwork just like an old-fashioned bank manager. When the loan is approved, the bank pays Choice Home Loans a small fee for performing the service on your behalf. Nothing could be easier. Your local Choice Home Loans representative is Craig Corbett - you can call him at anytime on 4647 5999.

6 Little Known Facts That Can Help

How A Gift Can Help You On Your Way

Many people would love to buy their first home but feel overwhelmed by their financial situation. They feel surrounded by debt or consider their income inadequate. Well, here's some heartening news ! Some financial institutions will allow any or all of the following when considering your application for a home loan ; Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ Ÿ

Gifts of money, lump sums from any source. Inheritance Parenting allowance Permanent pension Disability allowance War service pension Aged pension Superannuation / annuity from the army Investment income from any source

Do any of these items apply to you ? If they do perhaps you might wish to reconsider your ability to apply for a home loan.

6 Little Known Facts That Can Help

Understand The Rules Of Buying

Buying your first home is a sizeable undertaking and much care should be exercised before making the final choice.

G e t a s p e c i a l i st co nveya n c i n g solicitor or a conveyancer to help you with the contract - don't try and save money by doing this part yourself.

Be certain to get a pest inspection and a building inspection of the property you intend to buy before the cooling off period expires - these reports are like insurance and are invaluable.

Re-inspections are good – be sure to look at the home at least once during the cooling off period and again at least once before settlement.

The average settlement period (the time between exchange of contracts and settlement) is approximately 6 to 8 weeks. So be aware, this time goes faster than you think and the day of settlement is the day you can move in.

Be sure to conduct one last inspection before you settle to make sure that the property is in the same condition as when you signed the contract.

This is difficult advice for a first homebuyer. Understandably they are excited by the prospect of shopping for what might be their largest asset, the place they will call home. And having little or no experience they are apt to make mistakes. Here's some simple rules that may prevent you from making too many errors whilst buying your first home ; Ÿ

See at least 5 homes before you decide on a home - see 10 if you can.

Ask Mum and Dad (or any other trusted adviser) to have a look at the home you have chosen before you commit to the purchase.

Be prepared to sign a contract. These days agents won't take a property off the market for you unless you execute a contract for the purchase.

After you sign the contract to buy the home the law in NSW allows you 5 business days as a cooling-off period - time during which you could change your mind.

NOTE : THE DETAILS OF ALL LOAN PRODUCTS, ALLOWANCES AND GRANTS REFERRED TO IN THIS SPECIAL REPORT WERE CURRENT AT THE TIME OF PUBLICATION (20-09-2001). READERS ARE REMINDED TO OBTAIN UP-TO-DATE INFORMATION BEFORE PROCEEDING WITH THE PURCHASE OR SALE OF PROPERTY.

6 Little Known Facts That Can Help

FREE REPORT

The Smart Way To Buy A Property

Send an email to freereports@prudential.com.au today for your copy of this valuable report Find out more about our property services at

prudential.com.au

Title of Booklet Here jyp

CAMPBELLTOWN Serving the local community since 1988 47 Queen Street, Campbelltown Phone 4628 0033 INGLEBURN Serving the local community since 2000 31-33 Oxford Road, Ingleburn Phone 9605 5000 LIVERPOOL Serving the local community since 1994 3/52-58 Memorial Avenue, Liverpool Phone 9822 5999 MACQUARIE FIELDS Serving the local community since 1994 Cnr Saywell & Fields Roads, Macquarie Fields Phone 9605 5333 NARELLAN Serving the local community since 2015 5 Somerset Avenue, Narellan Phone 4624 4400

prudential.com.au

PLEASE NOTE : 1.

Recipients of this report are reminded that, although due care has been taken in the preparation of the within contained material, prospective property buyers, sellers and investors are always best served by making their own independent inquiries before entering into any real estate transaction. This report has been prepared for the sole and exclusive use of Prudential Real Estate clients and customers. The whole of the contents and design are protected by copyright. COPYRIGHT ÂŠ Michael O'Sullivan 2001-2015