A swag of changes in 2012 will affect first home buyers and home owners alike, reports
THE new year marks the introduction of several important initiatives that home owners and first home buyers should be aware of. First up is the arrival of home-loan fact sheets introduced as part of the Federal Government’s banking reform legislation.
Lenders are now required to provide a fact sheet for each mortgage you may be considering.
The beauty of this initiative is that borrowers can make a side-by-side comparison of each loan’s headline interest rate, and also each loan’s comparison interest rate – showing many of the fees and charges involved as well as the total cost of the mortgage over the full term.
Figures from financial comparison website Ratecity show that by moving from the average of the major bank’s standard variable rate of 7.3 per cent to one of the cheapest comparison rates available on the market, at 6.35 per cent, a borrower with a $400,000 home loan could potentially save around $240 in monthly repayments and more than $72,000 over 25 years.
Be aware, you will have to ask for one of these fact sheets. They may not always be handed out automatically but they’re definitely worth inquiring about. For more on what’s involved take a look at www.bankingreforms.gov.au
The coming 12 months will also see important changes that affect first home buyers including cutbacks to stamp duty concessions and other support schemes that will vary between states. In South Australia, the current $8000 first-home bonus grant will be scaled back to $4000 from July 1, 2012, and scrapped altogether after June 30, 2013.
Any reduction in concessions and other financial support is unlikely to be welcomed by first home buyers. However, the rate cuts we saw in late 2011 will provide some relief for first home buyers as well as existing home owners.
If you find yourself struggling with your mortgage in 2012, a new website is available that offers valuable information.
The Doing it Tough site, launched by Australia’s banks, is designed to help people facing a hard time meeting repayments on their mortgage and other household debt.
The site, at www.doingittough.info, features links to the hardship section of each bank’s website plus details of your rights and possible courses of action if you are unable to make a loan repayment.
There’s no magic cure to debt difficulties but this site will let you know just where you stand.