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The wider your search for qualified advice the more informed and aware you will become about your commitments. This will help decide how much you can afford to borrow and how much to pay back in loan repayments. There are loan calculators available on the internet which give payment indications based on current interest rates. You can also compare insterst rates offered by lending institutions. Cannex offer this service. Click here to go to the Cannex site.
Your financial institution will advise you on loan products and what the cost of repayment will be. You should ask for a written loan repayment schedule and other fees that may apply. You may wish to seek the advice of a finance or mortgage broker to do the research on loan options available.
The most common source of finance is by way of a secured loan where the lender takes out a mortgage over your house. The lender can then sell your house if you fail to meet your repayments.
When looking at a mortgage it is important to compare options. This can be done by mortgage brokers or through advisors employed by organisations such as employer services and unions, or specialised loan advisory services.
Housing loan packages can vary and be tailored to suit your financial position. Lenders will also offer incentives such as reducing or waiving fees to attract new business. Lenders will reduce lending rates if you consolidate your accounts with them. The key is be prepared to negotiate your terms personally or through a broker. The savings could be surprising.
People who find it difficult to get a conventional mortgage sometimes opt for a 'rent to buy' agreement. This is really an instalment purchase contract between a property owner and a buyer, often with a rental component. In these agreements the purchaser makes regular payments to the seller. Most of the payment is considered as rental but some is considered as either payment off the purchase price of the property, or as payment towards a deposit. Once a deposit has built up the 'purchaser' may then use this to help obtain mortgage finance to complete a purchase.
If you are paying a component in rent the law on residential renting applies to your agreement. That means that the 'seller' is responsible for maintenance, and can only evict you from the property in certain circumstances.
Usually the agreements don't allow the 'buyer' any equity in the property until the full price of the property has been paid. That means that if you pay nearly all of the purchase price but don't complete the payments you don't get any money back.
The contracts are usually for 2 to 5 years and sometimes more. If your circumstances change during that time you may not be able to complete the payments.
This option may be considered by anyone who may have problems with saving up a deposit. If considering this option it is wise to seek financial and legal advice on the contract.
A strata scheme divides property into lots with common property and a system of common management called a body corporate. You as an owner own the dwelling, but the scheme allows for common grounds or areas to be used by all owner members. The body corporate is responsible for the by-laws by which the property is managed, and all owners are members. Strata title schemes are common if you purchase a unit or conjoined house. The strata scheme is registered by the Recorder of Titles under Tasmanian legislation. For further information about the process click here.
In a residential strata scheme housing is grouped. For many people this offers a secure community atmosphere. The costs for maintenance of common areas such as gardens are divided among all members, and rates are set by the body corporate. It is a set cost which you should budget for.
Like any group living arrangement, disputes may arise from time to time. The Strata Titles Act 1998 provides for the hearing of disputes that cannot be resolved by the members or body corporate, through an appointed adjudicator. If the dispute is not resolved there are options for civil legal action.
Public housing schemes also allow for purchase options. In some circumstances public housing tenants will have an option to purchase the property they rent. Public housing tenants interested in purchasing their rental home may be eligible for a number of financial incentives. These include deposit assistance and help with hidden costs like stamp duty, conveyancing fees, and mortgage insurance premiums. Alternatively vacant properties may be placed on the market. These are available from around $95,000 - $110,000 and can be an attractive purchasing option for some buyers.
If you are interested in purchasing available public housing property you should contact your nearest Housing Tasmania Service Centre, or phone the Streets Ahead Sales Team on 1800 060 901 (free call).
Federal and State Governments administer various schemes for home buyers. Information can be obtained by contacting the government agencies responsible as you may be eligible for assistance.
The Federal Government First Home Buyers Grant is administered by the states and territories and is available to first home builders as well as buyers. The grant may not be accepted generally as a deposit to secure a loan but it will offset costs. The scheme is administered in Tasmania by the Department of Treasury and Finance.
There are also State Government based schemes such as the Home Ownership Assistance Program and the Streets Ahead scheme. For information the Housing Services Centres should be contacted for details about these schemes or the agency website.
