twinsmom65 Posted July 28, 2009 Share Posted July 28, 2009 Sorry, just a little rant and my feelings about the FHOG and the bloody banks here in Australia. On paper the FHOG looks great, but in reality, the lovely banks over here, do not want to let you use it to it's fullest potential. I thought the FHOG was the goverenments way of assisting first home buyers with their deposit towards their first home. To help people get on that first rung of the property ladder. For most people trying to save a deposit whilst renting is very hard, you can save but it will take years. Well the bloody banks over here keep moving the goal posts with respect to first time home buyers and how much money they need. Every bank here has now done away with a no deposit loan, some changed to a minimum of 3% but they have dropped that now and now you need a mimimum of 5% deposit on a house. The kicker with this is that it must be geniuine savings... regular contributions into an account for a minimum of 3 months, and must also be left untouched for a period of 3 months. Also you are not allowed to use your income tax refund, or gifts from family or friends as part of the geniune savings. You are also not allowed to use your first home owners grant towards this deposit, it must be on top of the 5% that you have saved. The only one I know at the moment that is allowing a 3% deposit is Keystart, the maximum value of the house you can buy is $412K. So I guess the point I am trying to make is, why the bloody hell do we have a first home owners grant, if you have to save the 5% your bloodyselves?? I would understand if you could buy a bloody house over here as a starter for $150k but you can't even buy a bloody shack for that here in Perth. It seems the government try to help and do one thing and the banks do their best to do the opposite and prevent you from getting the help. Sorry for the rant guys.... sometimes this country just makes me go ARRGH !!!!!! Cheers Karen Link to comment Share on other sites More sharing options...
keily Posted July 28, 2009 Share Posted July 28, 2009 Sorry, just a little rant and my feelings about the FHOG and the bloody banks here in Australia. On paper the FHOG looks great, but in reality, the lovely banks over here, do not want to let you use it to it's fullest potential. I thought the FHOG was the goverenments way of assisting first home buyers with their deposit towards their first home. To help people get on that first rung of the property ladder. For most people trying to save a deposit whilst renting is very hard, you can save but it will take years. Well the bloody banks over here keep moving the goal posts with respect to first time home buyers and how much money they need. Every bank here has now done away with a no deposit loan, some changed to a minimum of 3% but they have dropped that now and now you need a mimimum of 5% deposit on a house. The kicker with this is that it must be geniuine savings... regular contributions into an account for a minimum of 3 months, and must also be left untouched for a period of 3 months. Also you are not allowed to use your income tax refund, or gifts from family or friends as part of the geniune savings. You are also not allowed to use your first home owners grant towards this deposit, it must be on top of the 5% that you have saved. The only one I know at the moment that is allowing a 3% deposit is Keystart, the maximum value of the house you can buy is $412K. So I guess the point I am trying to make is, why the bloody hell do we have a first home owners grant, if you have to save the 5% your bloodyselves?? I would understand if you could buy a bloody house over here as a starter for $150k but you can't even buy a bloody shack for that here in Perth. It seems the government try to help and do one thing and the banks do their best to do the opposite and prevent you from getting the help. Sorry for the rant guys.... sometimes this country just makes me go ARRGH !!!!!! Cheers Karen totally agree karen ....we thought about taking advantage of the grant but when we realised that we would need the deposit we suddenly came back to earth with a bump lol ....cant sell house in scotland to get the deposit so we are stuck paying bloody rent .....which by the time our lease is up in march will come to $25000 !!! enough for a deposit ....:arghh: mrs keily Link to comment Share on other sites More sharing options...
Jackboots Posted July 28, 2009 Share Posted July 28, 2009 same thoughts.. same as keily , house in uk, want to move house here the rents are extotionate.. Link to comment Share on other sites More sharing options...
Guest iselinger Posted July 29, 2009 Share Posted July 29, 2009 Sorry but the banks are in business to make a profit and as we have seen if they lend to people who can't repay their loan everyone suffers! They can't assume price inflation to protect them against defaulters which has been their saviour over many of the last few years. If you were lending money to someone wouldn't you want some sort of guarantee that the borrower actually had the capability to pay back not only the loan but also have some money left for living and running expenses. The FHOG was only meant to make it easier for those to make the first step not be the total answer. Who wants another GFC because of another set of toxic debt from home loans that have gone bad? Link to comment Share on other sites More sharing options...
Kazzarazza Posted July 29, 2009 Share Posted July 29, 2009 Hi ladies, The FHOG was originally introduced to stop the building industry suffering when the previous Govt introduced the GST (VAT). They were worried that people would stop building there own home (house and land package type deals) The original $7000, back then, was equal to approx 10% average build price. Many people agree that the GST has now been in long enough, the playing field has levelled out and the FHOG should be scrapped. It has become nothing more than a political gimmick which, like the $900 "bonus" (read refund on tax) which will cost us all dearly in other ways. The banks - well they are another story. We could all right a book on them. They have, however, reduced the amount of deposit needed to compensate for increasing house values over the past few years. They used to require a 10% deposit not that long ago. Mind you, in a Perth and Sydney market which experiences big booms and then busts, rather than steady growth like other cities, I agree even a 3% deposit can be huge if you are buying "at the wrong time", so I do sympathise with people trying to enter the market for the first time. Cheers, Karen Link to comment Share on other sites More sharing options...
Guest ragdoll annie Posted July 29, 2009 Share Posted July 29, 2009 Surely the banks can see that if you can pay high rent(which in our case is more than a mortgage would be), you can afford a mortgage, have enough left for living expenses and extras,not be in debt...just cant save a deposit!! Link to comment Share on other sites More sharing options...
Quoll Posted July 29, 2009 Share Posted July 29, 2009 Surely the banks can see that if you can pay high rent(which in our case is more than a mortgage would be), you can afford a mortgage, have enough left for living expenses and extras,not be in debt...just cant save a deposit!! They probably want to see that you can save with your income - if you are able to rent and save then you are likely to have the capacity to have survival savings if you lose your job. Well, they probably havent thought of it in those terms but if you are right on the limit with your mortgage at this time then you are going to be seriously strapped when the mortgage interest rates go up (as they will, big time) and if, heavens forbid, you should lose your job then you will be able to weather the storm. A good (US) program on CNBC which is worth watching is Suze Orman for financial nous - sorry that is off track from the OP frustration with the banks (and we can all sympathize with frustration at banks!!!) but it is a useful little program. My frustration too is that the FHOG has artificially inflated the lower cost homes and enticed a whole lot of young people and they must think all their Christmases have come at once. However when the FHOG is reduced then the prices will go down and they will find themselves in negative equity fairly shortly. Also the interest rates will be rising soon and, if history is anything to go by, they will go up quite high and with rising unemployment those youngsters may find themselves in serious trouble. Link to comment Share on other sites More sharing options...
Guest ragdoll annie Posted July 29, 2009 Share Posted July 29, 2009 Yes i agree with you Quoll that the lower end of the market has been inflated,certainly round here anyway,and i wouldnt want to be buying one now for exactly the reasons you state..neg equity etc.. Annie Link to comment Share on other sites More sharing options...
Guest tracynben Posted July 29, 2009 Share Posted July 29, 2009 have you thought about building , thats what we are doing? We have to go with keystart cos they are the only ones that will allow you to pay $50 a week while constructing a home. The banks are harsh at the moment due to all the economic situation which you can understand to a certain point of view. You can build homes from as cheap as 285k at the mo depending on where you live, we are in baldivis have got a 530 sq plot for 158k and our house is costing about 171k to build, only thing with keystart is the house has to be a finished product so you have to include flooring and window treatments in with your loan, but you can add your own funds, and the whole grant can be used for your deposit. Its a way of getting into the property market. hope that helps in some way tracy Link to comment Share on other sites More sharing options...
Guest Toorak Trev Posted July 29, 2009 Share Posted July 29, 2009 If you cant save 5% for a deposit keep renting. Think what will happen when interest rates climb 2% in 6 months time. The FHBG is a distraction. Think of it this way $20k (or close to what ever it is at present) on $400k equates to 5%. Property prices fluctuated straight away too account for the increase so when its removed they will return to prior price levels. So what has the $20k done for you? Just got you in the market during a hot period. Best time to enter the market? When its cold. Link to comment Share on other sites More sharing options...
twinsmom65 Posted July 29, 2009 Author Share Posted July 29, 2009 Hi Guys, Thanks for all your replies. I guess my biggest frustration at the moment is with the bloody banks, we have been saving around $700 a week for the past 2 months, and we are anticipating a large tax refund, that we were going to put into our savings account for the deposit, coming up with the 5% is not going to be difficult for us, except for the fact that they won't recogonize the lump sum payment we have put in from our tax refund, so infact, even though we will have $9k from the tax refund, we can't count this towards our deposit. I guess I am just a little frustrated with the banks at the moment, as every month they keep changing their policies and keep moving the goal posts (hey they are almost as good as DIAC at moving goal posts). I fully understand that the banks don't want to take risks with the collapse of the housing market in the US and the silly subprime fiasco that happend stateside. Thanks again for the replies.... good luck to the likes of us who are struggling to get that deposit for our first house. I have come to the conculsion that we will probably have enough deposit by around April next year, hopefully like some of the posters have said, maybe once the extra FHOG has gone, maybe house prices will come down...who know's... I guess it depends on where the goal posts are then LOL. Cheers Karen Link to comment Share on other sites More sharing options...
Guest Toorak Trev Posted July 29, 2009 Share Posted July 29, 2009 How is it the tax refund is not taken into consideration? Did it not arrive from you overpaying PAYG during the year that would otherwise be put to savings? Or was it relative to a one off claim? Put it this way a 10% decline in prices over Dec/Jan will esculate your savings plan. Banks are incredibly risk averse at present but people have long memories and plenty of other sources of finance other than banks. Link to comment Share on other sites More sharing options...
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