hi guys.
Has anyone used the Victorian homebuyers fund?
victorian homebuyers fund
Page 1 of 1
I havent, and i havent looked to much into it, but on face value its not the saviour its trying to make out to be. Shared equity in your home is never a good idea.
The only benefit it gives is not needing to pay LMI, because the rest of the deposit is fronted by the govt. The LMI is generally not a massive hurdle anyway and gets capitalized into the loan funds, so not something you need to actually save for and barely ncreases your monthly repayements. It also means that any equity growth is yours 100% to use how you wish, not something you need to work out with the govt every time you need to access it.
The bit im not familiar with is how you can buy out the Govt from their 15% equity when you want to. And make no mistake, you want to. Otherwise when its time for you to move on and buy another house, you want that equity for your next home, not having to have to give it back to the Govt, leaving you with less cash than you thought for your next purchase. But as time goes on and their 15% equity equals more $, buying them out becomes more and more difficult.
You may also be limited to how you use the equity as security in any other lending, because its not all yours.
This scheme looks like its helping you, but in the log term it makes the govt money. You're helping the govt by letting them invest in residential real-estate which has a long term positive return for them. This doesn't help you unless you literally never intend on selling, and living in the house for 30+ years. even if that's how you think you will live for the foreseeable future, a lot can happen in 30 years (even 10).
The only benefit it gives is not needing to pay LMI, because the rest of the deposit is fronted by the govt. The LMI is generally not a massive hurdle anyway and gets capitalized into the loan funds, so not something you need to actually save for and barely ncreases your monthly repayements. It also means that any equity growth is yours 100% to use how you wish, not something you need to work out with the govt every time you need to access it.
The bit im not familiar with is how you can buy out the Govt from their 15% equity when you want to. And make no mistake, you want to. Otherwise when its time for you to move on and buy another house, you want that equity for your next home, not having to have to give it back to the Govt, leaving you with less cash than you thought for your next purchase. But as time goes on and their 15% equity equals more $, buying them out becomes more and more difficult.
You may also be limited to how you use the equity as security in any other lending, because its not all yours.
This scheme looks like its helping you, but in the log term it makes the govt money. You're helping the govt by letting them invest in residential real-estate which has a long term positive return for them. This doesn't help you unless you literally never intend on selling, and living in the house for 30+ years. even if that's how you think you will live for the foreseeable future, a lot can happen in 30 years (even 10).
Related