Australians with plans to pull their super and use it as part of a deposit for a HomeBuilder claim may run into some pesky fine print that sets their plans back considerably.
Real Estate Buyers Agents Association (REBAA) president Cate Bakos warns of a little-known rule that banks are beholden to when lending money: a rule that may completely throw many HomeBuilder timelines off track.
โThe $10,000 early superannuation option is meant to be for managing the economic crisis and in the current climate itโs a signal to lenders that a household is in financial distress,โ Ms Bakos said.
โBorrowers who think itโs a clever idea to access it and put it in the savings account for a house deposit need to think carefully. Based on Responsible Lending Guidelines, three months of โcleanโ bank statements are now required.โ
In other words, those potential home owners who thought that using their super to top up a deposit would show the banks their financial strength should think twice. The opposite is actually true.
โChasing the new build grant isnโt necessarily a great idea for every buyer,โ adds Ms Bakos.
โDue to the short timeframes that the initiative is bound by, some borrowers may find themselves running out of time to claim the $25,000 benefit due to the strict rules around the entitlement.
โFor those who struggle to have their building contract signed off by 31 December with a builder who is licensed to assist with the grant, they may find that they are holding a contract that sees them bound to complete the sale without the grant that propelled them to purchase in the first place.โ
And don’t be blinded by the promise of free money. There’s no such thing. Many of the short term benefits that result in buyers rushing through their development plans may result in long term issues.
“The risks around off-the-plan are still very real, particularly with valuation shortfalls and limitations to the finance approval process,โ she said.
โNew house and land packages also have their challenges with many investments located a greater distance from CBD. For some, this could be a factor if commute times or distance from family is a sensitive issue.
โBorrowers need to ensure that they are getting a suitable loan product,โ she said.
โLoans vary and missing out on a key feature (such as offset) can cost thousands in the long run.”