There are number of benefits to own your very first house. The most obvious is the pride to own the property. However, there are more practical incentives to buy that very first house:
Currently in Australia, it is often cheaper to build then to rent. For the past five years the interest rate on loans has only slightly increased but rent has sky rocketed. This means that for the next ten or so years it is safer to take a mortgage then to rent the property.
The first home owners grant was introduced in July 2000. Under this grant everyone has received $7000 for the purchase of their first home .
However, the system has been modified. Today, the first home owners grant applies only to contracts signed prior January 1st 2010.
The contracts signed for the property or construction of the first home after the above date also qualify for the grant. However, the condition is that the total price for the property does not exceed $750K. The home loans for first time buyers often incorporate the grant. However, conditions and exceptions apply.
To stimulate the construction business and help with outrageously high property prices, Australian State Government of Victoria introduced a First Home Bonus. The scheme allows home loans for first time buyers to be reduced by $13K. However, there are conditions:
The bonus offers additional $6.5K for the purchase or construction of a new home in the regional Victoria. This is designed to attract more people into rural areas away from urban congestions. This means that the home loans for the first time buyers in regional Victorian municipality may be reduced by as much as 26.5K.
What happens to home loans for the first time buyers who have a bad credit history? Generally, the assumption is that the lack of security and the questionable 'credit resume' will make it impossible to obtain a loan.
In fact there is a lot of companies, which specifically deal with the bad credit home loans. Some of those financial oraganisations provide service of loan consolidation to ease the repayments.
So where is the catch? If you intend to buy your first home then you most likely do not a have financial security. The salary or wages plus a good credit record are the criteria to obtain the home loans for the first time buyers. The loans which rely on financial income and the credit history are regarded as unsecure. The unsecure home loans for people with a bad credit are either difficult to get or carry very high interest rate.
The home loans for people with bad credit who do own a property are called secured loans. Here, the applicants use home equity to secure the funding. Secure loans are much easier to get. In this case the bad credit history will unlikely impair the chance to obtain the finance.