1st Street Newsletter MAY 2007

Contents

First Home Owner Grant
Renovate For Profit

Jeremy Fisher
Director

518b Old South Head Rd
Rose Bay NSW 2029

Tel:	1300 880 109
Fax:	02 9371 1990
Mob:	0411 33 9998

E-mail:	Click Here
Website:	Click Here

Welcome to 1st Street Home Loans. We are an Australian-owned mortgage advisory company with a difference. Due to our strong relationships with the banks, industry leading technology, honest approach and only the highest level of service, we were recently awarded as the number 1 independant mortgage broker in Australia.

With an increasing number of people today turning to mortgage brokers for professional and unbiased service, 1st Street Home Loans is fast becoming their broker of choice. We offer a free and impartial service that provides access to over 30 residential and commercial lenders and more than 500 loan products from across Australia.

The Mortgage and Finance Association of Australia (MFAA) is the peak body for the Australian mortgage industry. Members include banks, mortgage managers, credit unions, mortgage brokers, wholesale funding institutions, real estate agents, valuers, solicitors and conveyancers.

All MFAA members belong to an independent dispute resolution scheme such as the Credit Ombudsman Service Limited.

Loan writing members are also required to become Accredited Mortgage Consultants (AMC). An AMC is covered by professional indemnity insurance, has passed probity checks, and has met education and experience requirements set out by the MFAA.

Hello,

Welcome to 1st Street's monthly newsletter. If you require any assistance in obtaining the right loan for you, or if you have any questions in regards to an existing loan, please do not hesitate to contact me personally on 1300 88 01 09 or 0411 33 9998.

Kind regards,

Jeremy Fisher

First Home Owner Grant

Young Couplw Many would-be first home buyers find it a struggle to get started on the road to home ownership.

However, help is at hand with a $7,000 grant from the Federal Government.

If you are buying or building your first home, you may be eligible for a helping hand under the First Home Owner Grant Scheme (FHOG).

The FHOG is a joint Federal and State Government initiative offering eligible first home buyers a $7,000 grant. The grant applies to residential dwellings only and does not apply to vacant land.

It was originally introduced by the Federal government to help compensate for the effect of the GST. Although a Federal initiative, the scheme is administered by the various state and territory governments.

Who is eligible?

The following criteria are used to determine who qualifies to enjoy the grant:

Individuals over 18 years of age - a company or trust does not qualify.
An applicant or applicant's spouse must not have received an earlier grant or previously owned a home in Australia before 1 July 2000.
At least one applicant must be an Australian citizen or permanent resident
Joint applicants are restricted to one application and only one payment will be made.
At least one applicant must live in the home as their primary place of residence for a continuous period of six months, within 12 months of settlement or construction.

Eligible homes include newly built or established dwellings.

When will the grant be paid?

For existing homes, payment will be made at or after settlement of the property purchase. For newly built homes, payment will be made after the Certificate of Occupancy/Completion has been issued.

Are All States and Territories The Same?

They all offer and administer the basic $7,000 grant. However, some of these authorities offer extra incentives to first home buyers.

“Use the grant to reduce the life of your loan.”For example, buyers in New South Wales and Victoria get a further bonus from their state governments.

Other states offer various benefits such as stamp duty concessions.

To find out more you should contact your local Office of State Revenue. You can access their websites from the Federal Government’s national website at www.firsthome.gov.au.

Don't forget that we can help you with the paperwork.

How To Reduce Your Costs

Although you have choice in what you use the grant for, a sensible approach is to use it to decrease your costs. Used sensibly, it can save you a lot more than just the $7,000.

For example, by using it to reduce the amount you initially borrow, you can reduce the amount of mortgage insurance that you pay, or actually not have to pay any mortgage insurance at all if the amount borrowed is less than 80% of the value of the property.
Alternatively, you may have decided not to use the grant (or you hadn’t applied for the grant) until you actually settle on the property, and therefore borrowed the full amount that you required for purchase. By putting the grant into your loan upon settlement, you can reduce the monthly payment.
Better still, you could put the grant into your loan but continue to make the originally calculated payments – so reducing the life of the loan, perhaps by years.

Renovate For Profit

Renovate Renovating your home is often seen as a good way to increase its value by more than the cost of the work.

A sensible approach and careful planning will make sure that this is the case.

According to the Housing Industry Association, the level of renovations increased during 2006 for the first time in three years, indicating the sector was undergoing a sustained recovery. Looking forward, total spending is forecast to exceed the $30 billion mark for the first time in 2009/10.

It’s easy to see why. With the government charges, legal fees and removal expenses, the cost of moving can easily add up to $30,000 or more.

Therefore, renovating your existing home is an attractive alternative.

But just as homebuyers need to carefully plan and research their purchase, home renovators need to do their homework.

Knowing what improvements add value – and what to avoid – can help you maximise the value of your property and boost its appeal. And it’s important to remember that there will be a day when you do decide to sell – so you want the renovations to have added value to your home.

Listen To The Experts

Homeowners and investors should ensure their renovation plans are realistic, achievable and ultimately add value.

Renovators should seek to improve the first impression, the design concept and the overall description of a home rather than the finite details.

Renovations that add value include:

Adding extra rooms
Improvements to the overall layout
Bigger, more functional bathrooms and kitchens.

For example, a four-bedroom home is in an entirely different price category than a three bedroom home. So adding a fourth bedroom would be better than spending a lot on expensive finishes to existing rooms.

Similarly, adding a garage is appealing as it adds vehicle security and weather protection, as well as some more storage space.

Also remember that the location of the property will also dictate a “ceiling” on the price it will be worth – so don’t over capitalise.

Structural improvements

“Make sure you are adding value by what you’re doing.”If you’re purchasing a property with a view to renovation, lookout for structural problems that will be expensive to fix.

Sub-flooring, roofing and termite problems, and aged services such as wiring and plumbing, are expensive to repair.

But whilst essential, they do little to add to the visual appeal of the property and therefore are not likely to give you a good return on your renovation dollar – unless you negotiated a price reduction on the property in the first place.

Get Professional Advice

Renovators should also avoid the pitfalls of signing a building contract that leaves too many loose ends. Get professional advice, a good design concept and good working drawings that allow you to seek competitive tenders.

Ensure that the contract covers all potential requirements and leaves no room for builders to claim for variation, in turn decreasing the chance of unexpected extra costs and run-out building schedules.

If you are making substantial changes to a property, you should try and hire architects and builders who have worked with the local council previously and understand exactly what permits, restrictions and depth of detail they require. This can avoid lengthy delays and costly rework whilst the plans go back and forth to the council.

Study the market

Although renovating is a popular and achievable way to add value to a home, the extent of the value added often reflects the market. A boom market will deliver a better profit on renovated homes than a subdued market.

As a provider of home loans we offer a one-stop-shop for all your finance requirements, including loans for renovations. This loan can often be added to your existing home loan, or refinanced to a new home loan with the total amount borrowed at a more competitive interest rate.

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