7 Steps to prepare for the $50,000 NEW home owner grant! Investors included! One month to go! Act Now!

Australia’s peak property body is lobbying the government to provide a $50,000 grant to buyers of newly constructed dwellings.

The Property Council of Australia has proposed the ‘New Home Boost’ grant as part of its seven‐point plan to the National Cabinet for kickstarting construction and the economy.

Buyers of newly built homes would receive a $50,000 incentive from the Morrison government under a $2.5 billion plan from the Property Council.

The property council estimates that the $50,000 “new home boost” for buyers of new housing, would stimulate the construction of 50,000 dwellings and support 200,000 jobs.

It would dwarf the $7,000 to $21,000 first home‐owner grants on new buildings during the global financial crisis.

The program would run for 12 months (1 July 2020 to 30 June 2021) and be limited to only the first 50,000 properties. There would be no cap on the value of the home. It would be available to all types of buyers (not just first home buyers).

Step #1: Ensure all your documentation is in place

The first stage would be to ensure that you get your financial matters in order i.e. pay slips, tax returns, any outstanding compliance matters, pay summary from the last 2 years, driver’s license and the address on the back of the drivers’ license or the correct one if you have recently moved.

As the first few things are set in place, then the next step can start pretty simply.

Step #2: Interview with Mortgage Broker The next step would be an interview with your mortgage broker or lender.

This generally comprises of information gathering on addresses, pay information, your savings history, so that all that data is captured accurately.

Get an idea of your borrowing capacity and funding position.

Step #3: Determine the strategy.

If you are an existing property owner, are you able to re‐finance? Is your current Home loan fixed or variable? Knowing these basic facts will enable you to be in the best position to get ready so that you have control.

If you are a first home buyer, consider getting a pre‐approval from the finance provider of your choice.

Do you need to adjust your finances to meet the funding position and borrowing capacity requirements?

There are several strategies that can apply to help you make an informed decision. Discuss these with your broker.

Step #4: Get ready to purchase.
If it is a multi‐part strategy, take action now on the steps that can be completed e.g. re‐finance on more favourable terms that meet your objectives.

If you are a first home buyer, make the changes necessary to be ready for purchase. Seek a pre-approval.

Here, you decide if you are ready to purchase.

Step #5: Identify a house to buy

Find a balance between the lifestyle you want and what you can comfortably afford.

Know why you’re buying.

Reflect on why you want to buy. Are you planning to grow your family? If you are buying with a partner, talk about this together. Being clear about why you are buying helps narrow down your property search.

Consider your must‐haves and nice‐to‐haves.

Make a list of your:

  • ‘must‐haves’ (can’t do without), e.g. property size, layout, public transport, schools
  • ‘nice‐to‐haves’ (could do without for now), e.g. design, fittings, outdoor

space Focusing on your must‐haves will help you prioritise the things that matter most in the decision‐making process.

Stick to your price range. If you have been pre‐approved for $500,000, don’t waste time looking at properties advertised at $600,000. If your ideal suburb is outside your price range, keep an open mind about where to look.

Do your research. Look online, talk to real estate agents, go to property inspections and explore what’s on offer.

Pace yourself — your search could take months.

Step #6: Know the steps of getting a home loan as per the terms of your chosen lender and the criteria of the $50,000 grant.

Your broker will seek to find out how much knowledge you may have around home loans so that they can guide you and educate you about the process and your options.

The broker can explain the different types of loans, offset accounts, interest rates and many things like that. You can go through the product comparison and choose your lender and terms.

Step #7: Be alert, when the proposal is approved. Buy only after checking with your broker and solicitor!

Identify a property within your budget. Check that you meet the criteria for the $50,000 grant.

Engage a solicitor to check the contract of sale before you sign. Be aware of all the conditions in your contract of sale, stamp duty and the settlement terms.

Make an offer!

Submit an application for the loan to the lender and finalise the loan.

Purchase building and contents Insurance. Settle on the property and move in or rent ?

Manage your cashflow and stay on track with your repayments.

Happy Investing!

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