FIRST START IS A LEG UP
- Thursday, April 17, 2008
Recently the Great Australian Dream of owning a home seemed to be exactly that for many families – a dream.
But Jessica Hutchins heard about the State Government’s First Start scheme and decided to turn her dream into a reality.
Currently living in her parents’ investment property in Nollamara, she needed to make a decision as they were thinking about selling everything and moving to Queensland.
“I didn't want to have to find another rental property which meant that I had to get time off work to go and look through, only to be rejected in preference to a young working couple. It was very disheartening and also scary to think that I might not have somewhere for my son to live, so I decided to start looking around at house and land packages,” said Jessica.
“I went onto the Homestart website I saw the shared equity opportunity and applied for it. Homestart responded quickly and provided me with all the information that I needed to decide to go ahead.”
When she called Homestart and made an enquiry to see if she qualified for the Government shared equity scheme, she spoke with Homestart Loan Qualifier Terri Garbutt, and Terri made an appointment for Jason Burns to visit.
Jason Burns, Homestart's sales representative, acquired a block in Banksia Grove (near Carrama) for Jessica and she selected Homestart’s 'Tranquility', a four bedroom two bathroom design.
And when she got the approval?
“I think at first I was a little bit surprised, scared, exited. I never thought that I would have the opportunity to buy a house and I couldn't believe that I was able to,” said Jessica.
Under the scheme, low to moderate income first homebuyers can purchase an existing home or build a new one in conjunction with Keystart, the State government’s finance lender) and the Department of Housing and Works.
The Department then assists with the purchase of the home with extra finance up to forty percent of the budget, dependent on the client’s assessable income.
To qualify, the total assessable income has to be up to $80,000 for singles or couples with dependants, up to $70,000 for couples and up to $50,000 for singles.
“This means that my son and I don't have to move ever again if we don't want to. We can be settled in our home and I can enroll Harry into Kindergarden which he starts next year and not have to worry about if we will still be living there in a year. We are currently living in a unit with a very small backyard, and our own home means that Harry will have a great backyard where he can have a trampoline and play backyard cricket. Banksia Grove seems like a real community and I am really looking forward to moving there,” she added.
Terri Garbutt explained how the scheme has assisted so many young people like Jessica.
“It was introduced in February 2007 when increased prices in the property boom at the time made the great Aussie dream of owning your own home seem out of reach.
“The great news is, under this scheme, the initial cost of purchasing a property can be as little as $2000, given that the First Homeowners Grant and the fact that this market is also exempt from stamp duty. These ‘leg ups’ all assist with the shortfall in deposit and fees such as rates and taxes and settlement fees.”
The house can be sold at any time after a valuation, where a minimum sale price is determined, and the proceeds are split on a 60/40 basis, taking into account any improvements made by the owners over the years.
First option to buy must be given to the Department of Housing and Works, but if they refuse, then the property can be sold on the general market. The owners are subject to an annual income review on the anniversary of the loan, and Keystart then assess the ability of the owner to be able to purchase more equity in the home, at a minimum of five percent at a time.
For young couple Brad and Vanessa Miller, a two year search for an affordable mortgage proved fruitless and they had resigned themselves to perhaps never being able to achieve home ownership.
“We tried numerous attempts at qualifying for a home loan, and had no success,” said Vanessa.
When Brad heard a radio commercial for the Government’s First Start Scheme, things started to look up and their luck changed.
“It came as a wonderful surprise when we qualified for the scheme and couldn't have come at a better time,” said Vanessa, who at the time was pregnant with their first baby.
“We pretty much started looking straight away and we contacted Homestart who found us a house & land package in Brighton.
The Millers had been renting in Scarborough for 4 years when they decided to look further into the Scheme.
“The weekly rental was a close comparison to what we are paying in mortgage, and best of all we are paying off our own mortgage, not someone else's,” said Vanessa.
In fact, based on the maximum property price, repayments can be as low as $350 a week, which is comparable or in some cases, lower than what many families are paying in weekly rent.
Terri says that the scheme has been incredibly popular and made simple for clients as the Homestart qualifying team walks them through the process.
“Because this concept has been enormously successful, our team has had to become experts on every aspect of the scheme and be able to translate the document into language that the average person can understand,” she said.
“Terms such as ‘assessable income’, ‘equity share ratio’ and ‘deferred establishment fees’ are not terms which people come into contact with every day, but they are terms which the Homestart qualifiers are intimately acquainted with and can be easily explained.
“It’s a win win situation for all involved. Prospective homebuyers can now recognise their dream of owning a new home with an affordable mortgage repayment and a home that is growing in value,” said Terri.
SHARING THE PAIN
- Monday, March 31, 2008
UNTIL recently the great Australian dream of owning a home has been exactly that for many families a dream. For Brad and Vanessa Miller, a two year search for an affordable mortgage proved fruitless and the young couple resigned themselves to never achieving home ownership.
"We had numerous attempts at qualifying for a home loan and had no success," Vanessa says.
But then Brad heard a radio commercial for the State Government's First Start scheme.
"It came as a wonderful surprise when we qualified for the scheme and it couldn't have come at a better time," says Vanessa, who at the time was pregnant with their first baby.
"We pretty much started looking straight away and we contacted HomeStart who found us a house and land package in Brighton.''
Under the First Start scheme, first home buyers on low to moderate incomes can buy an existing home or build a new one in conjunction with Keystart the State Government's finance lender and the Department of Housing and Works.
The department then helps with the purchase of the home with extra finance up to 40 per cent of the budget, dependent on the client's assessable income.
To qualify, the total assessable income has to be up to $70,000 for families, up to $43,000 for singles and up to $60,000 for couples. Other factors, such as existing debt levels, can affect a person's ability to qualify.
HomeStart loan qualifier Terri Garbutt says the scheme has assisted many other young couples like the Millers.
"It was introduced in February 2007 when increased prices in the property boom at the time made the great Aussie dream of owning your own home seem out of reach,'' Terri says. "The great news is, under this scheme, the initial cost of purchasing a property can be as little as $2000, given that the First Home Owners Grant applies and the fact that this market is also exempt from stamp duty.
"These 'leg ups' all assist with the shortfall in deposit and fees such as rates and taxes and settlement fees."
The house can be sold at any time after a valuation, where a minimum sale price is determined, and the proceeds are split on a 60/40 basis, taking into account any improvements made by the owners over the years.
First option to buy must be given to the Department of Housing and Works, but if they refuse, then the property can be sold on the open market.
The owners are subject to an annual income review on the anniversary of the loan and Keystart then assess the ability of the owner to be able to purchase more equity in the home, at a minimum of 5 per cent at a time.
The Millers had been renting in Scarborough for four years when they decided to research the scheme.
"The weekly rental was a close comparison to what we are paying for a mortgage, and best of all we are paying off our own mortgage, not someone else's," Vanessa says.
In fact, based on the maximum property price, repayments can be as low as $350 a week, which is comparable or in some cases lower than the amount many families pay in weekly rent.
Terri says that the scheme has been incredibly popular.
HomeStart's qualifying team has made the process particularly simple by walking clients through each stage. "Because this concept has been enormously successful, our team has had to become experts on every aspect of the scheme and be able to translate the document into language that the average person can understand," Terri says.
"Terms such as 'assessable income', 'equity share ratio' and 'deferred establishment fees' are not terms which people come into contact with every day, but they are terms which the HomeStart qualifiers are intimately acquainted with and can be easily explained.
"It's a win win situation for all involved. Prospective homebuyers can now recognise their dream of owning a new home with an affordable mortgage repayment and a home that is growing in value."
HomeStart - Phone 9231 4567omestart.net.au
Courtesy of The Sunday Times HOME magazine, December 9, 2007.
Taking the mystery out of Home Buying
- Monday, October 16, 2006
To young people out looking for their first homes, the current real estate market might seem daunting.
Most of the affordable established properties can seem like little more than crumbling rat-traps, despite the advertising hyperbole of 'ideal fixer upper' or 'renovators delight' and block prices have increased so much that buying a house and land package might appear to be beyond the means of many. Then there is interest rate rises!
HomeStart, a company set up 18 years ago specifically to cater to the needs of first homebuyers, understands the dilemma.
It does seem daunting says General Manager, Sue Marshall, "but there are still opportunities open to people with access to the right information and guided, educated choices."
"The first thing we do for you is work out a borrowing capacity, and suitable repayment level, to ensure you are comfortable with that. HomeStart are ideally suited to help with this through their association with The Loan Company, which offers a huge range of home financing options for all HomeStart clients.
HomeStart offers a wide range of house designs and through its association with land developers, has access to a selection of surprisingly affordable land options. And they will explain all you need to know about legal fees, settlement, stamp duty and all the other little mysteries of home buying.
Housing opportunities in WA are still fantastic in terms of affordable homes.
HomeStart can be contacted on 9231 4567
Dreaming of a complete home and land package?
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A complete 4 bed, 2 bath house and land package includes all of this and more;
- House and land including siteworks allowance
- Fencing and landscaping allowance
- Carport, hardstand and driveway
- Floor coverings
- Vertical blinds to windows and sliding doors
- Sunheat 300L solar hot water unit
- Flyscreens to windows and sliding doors
- R2.5 roof insulation
- Security System
- Stainless steel appliances
- Gas package and negus point
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