Hi,
As mentioned previously I am a 22 year old uni student (so with currently no stable income) very interested in getting into the investing market. I have signed up for a first home saver account however I have not put anything in it yet as I am not sure if this is the path I want to go down. Obviously I want to take advantage of the benefits offered to us by the government, but I am more focused on buying investment properties as opposed to my home I will have forever. With the first home saver account it states that you have to live in the purchased house for at least the first six months of purchase. Does anyone know if after that it is possible to move out and turn the house into an investment opportunity. I am currently based in Canberra and may be still for a while so I like the idea of buying a slightly run-down place, living in it for the first six months while doing it up and then possibly selling it or renting it out afterwards. Does anyone know if this goes against the first home saver rules?! Also if I decide to terminate my first home saver I would be interested in a high interest savings account. Anyone have any recommendations?
Thanks,
S
Hi Sykes
Firstly welcome to the forum and I hope you enjoy your time with us.
Obviously the focus will need to be on getting gainful employment once you finish your uni studies so that you can service a loan but assuming this can be achieved there is no reason why you cant purchase a property as your PPOR, qualify for the relevant Grant and exemptions and then rent the place out.
Only issue i can see is serviceability as remember you the FHOG wont increase your borrowing capacity and you will be limited to on your earnings capacity early in your working life.
Look to set up an interest only with 100% offset account. Not all lenders will allow this on a PPOR so a good independant mortgage broker should be able to point you in the right direction.
In regards to a high interest online account look at someone like Ubank, ING or The Dragon. If you are preapred to tie the funds up for 3 months someone like Heritage is very competitive.
Good luck and congrats to wanting to start so young.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As long as you live in the house for a minimum of 6 months within the first 12 months you can
Keep your govt grant and rent it out.Hi Jake
That is the case with the FHOG but not the Stamp Duty concession.
Different in each State,
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Ok so at what point do u pay stamp duty? When it becomes an investment?
Yes depending on the State usually if you make it an IP in the first 12 months.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard and Jake,
Is it exciting wanting to start so young but also frustrating because I'm not quite set up enough to do much about it yet!
I was wondering what you think of the goal saver accounts that seem to be constantly advertised at the moment. Would these possibly be better than a high interest savings account? Commonwealth Bank and St George are some of the ones that offer it.Thanks,
S
No i believe the ones i mentioned will give you a higher rate.
The Dragon = St George Bank
Ubank = National Australia Bank
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If you "cancel" the first home saver account then the money needs to be moved to your superannuation unfortunetly.
With a high interest savings account, as QLD007 mentioned in post 2, this pays alittle less but gives you more flexability.
Save save save like a slave until your 6months into a stable job, leverge into the market and go from there. Read up on genuine savings rules, and did I mention save lots!! This should set you up for a 95% purchase + costs.
Best of luck and it stick to it
The first home saver account is only good if your confident your going to buy a place within 4 years…ie dont do it if your still at uni.- only consider once your in a relatively safe job for at-least 1 year…
Any amount in the first home saver account will go to your super IF:
1. you dont buy within 4 years
2. You cancelRichard is right, Ubank and Dragon are pretty good and owned by the above banks….i think ubank is currently 6.3%???
Skyes- you could buy the place to live in and renovate while your living there ( much easier to organize and do renovation if your living there) then convert to IP …the renovation can not be claimed but can be depreciated each year.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Its also worth mentioning you can use the first home saver account in 2years.
June 30 2011 – open account
July 1 2013 – draw down2 years is better than 4
How does that work? I thought it had to be four, that is why so many people don't sign up to it.
you must buy ” WITHIN” 4 years. But must have an active account for one full financial year.
Meaning after the 1st year…you can buy when EVER you like. ( 1.5, 2, 2.5, 3…)..up to a max of 4 years.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
A lot of ppl dont sign up.. because they are not confident they can afford to buy a place within the 4 years time frame.
In general, as long as you:
1. Can afford the loan amount your requesting
2. Have a “FULL time job” not contracting ( contracting is fine…but must do it for min 2 years)
3. PAYG paid- ie not self employed
4. Been with the employer for 3 month – even if your on probation it’s fine.As long as you meet the above in general with no defaults or adverse CR file you be able to get a loan.
Mick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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