Smart Start by Wilson - First Start Workbook

Smart Start by Wilson - First Start Workbook

by Smart Start

P OW E R E D B Y

STEP BY STEP GUIDE TO Building your dream home

Welcome to First Start, a no-nonsense blueprint for making your first home your reality.

First Start is a part of Smart Start Programs and is an initiative of the NXT Building Group - one of Australia's largest and most trusted builders. We’ve drawn on the combined knowledge and resources of our group to produce these step-by-step program to building your dream home.

The First Start Program teaches you everything you need to know about the entire process, to ensure your home-building experience is as simple, fast, aƒordable and stress-free as possible. It outlines all the things you need to take into consideration and all the ways we can help along the way.

by Smart Start

We’ve called on experts in financing and building to deliver this program which will:

Owning your first home is the great Australian dream. Building your own home, to suit your personal needs and wants, is a dream come true.

Explain the finance process

Help you understand how to save for and/or increase your deposit

Identify the ideal loan to suit your individual circumstances

Ensure you understand all the costs of building your first home

Explore which government grants are available to you

Mentor you to achieve your dream of home ownership

Identify which home designs suit that block

Show you how to select the perfect block of land

It’s true there are a lot of things to consider when building a home but the Smart Start Team has a wealth of experience and we’re happy to share it with you every step of the way!

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Let’s get started >

Smart Start comes with the backing of Wilson Homes – one of Tasmania’s largest residential builders. Wilson Homes has been building award-winning homes to the highest standards for more than 30 years. With operations across Tasmania, Wilson Homes has an unparalleled reputation for reliability, quality and exceptional customer service. Working with Smart Start gives you the peace-of-mind that comes with Wilson Homes size, strength and reputation. We’ve helped thousands of people realise the dream of building their first home, taking them step-by-step through the process, sharing the load and making it as simple as possible. We look forward to doing the same for you.

P OW E R E D B Y

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Three steps to home ownership

Finance

by Smart Start

The First Start program is broken down into sections to clearly and comprehensively cover these three steps. Each section includes simple check lists and handy hints. We’ll guide you through each step at the pace that’s right for you and your circumstances. As one of the nation’s leading builders, Wilson Homes has an enviable reputation for being unquestionably trustworthy. Not only is the First Start program Australia’s most compre- hensive guide to building your first home, the cornerstone of the program is its transparency. In this program, we've outlined every detail of the process to ensure there truly are no surprises. Using this program, your Smart Start Mentor will take you through the three major steps to building your first home:

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Buying a home is the biggest purchase most of us will make. It can seem daunting – so many choices, so many decisions. Building your own home can seem like even more of a challenge, but it doesn’t have to be. Whether you can already picture your dream home or you’re still trying to choose the right neighbourhood, this should be an exciting time. When you work with the Smart Start Team, we’ll ensure it is. There’s lots to be said for getting into the market as soon as possible. Home ownership generally oers major financial advantages, so buying your first home as early as you can is a solid plan. For many first home buyers, home ownership may be a lot closer than you think.

Home & Land Selection

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We’ll show you how!

Planning & Building Your Home

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Program Snap Shot

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Your Smart Start Mentor will show you how to:

Your Smart Start Mentor will introduce you to your Building and Design Consultant who will: ▶ Determine which

▶ Choose the right community ▶ Select the right block of land ▶ Estimate how much money you need to secure your ideal home and land package ▶ Secure your block of land with the initial deposit. This is completed by the sales team ▶ Set up a Pinterest account to help you design your perfect home

▶ Explain all the optional extras you can choose from within your budget ▶ Confirm all the options you’ve requested are included in your Proposal ▶ Secure your home

2 Home & Land Selection

home design/s suit the block and are within your budget ▶ Show you the standard inclusions that come with your chosen home ▶ Identify everything you need to include in your new home

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Your Smart Start Mentor will: ▶ Give you an overview of the First Start program ▶ Introduce you to your Home Loan Specialist Your Loans Specialist will show you: ▶ How much you can borrow and, if necessary, how to increase your borrowing power using the Deposit Starter program ▶ Dižerent finance options ▶ The total finance costs to build ▶ Which government grants you’re eligible for and how to access them

They will then: ▶ Commence your home loan application ▶ Issue a pre-approval certificate based on your borrowing capacity ▶ Complete all aspects of Step 1 of the First Start program with you

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package with the Acceptance Fee

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ME ET I NG 6 :

ME ET I NG 5 :

Online

▶ Secure your home with the signing of the Preliminary Agreement and payment of the Acceptance Fee.

▶ My Home Appointment

▶ Consolidated Tender Presentation and Acceptance

Planning

APPO I NTMENT 1

APPO I NTMENT 2

APPO I NTMENT 3

APPO I NTMENT 4

APPO I NTMENT 5

APPO I NTMENT 6

Your Project Coordinator will give you a copy of your Building Approval documentation. Once we’ve obtained your building approval, you’ll be asked to pay your 5% deposit (less the acceptance fee you’ve already paid). Your Smart Start Loans Specialist will then provide the Authority to Commence Construction (ACC) to Wilson Homes so construction can commence.

Your dedicated Project Coordinator will phone you to introduce themselves and begin the Planning Stage. Walkthrough tour of the My Choice Design Studio to explain your "New Home Design Inclusions". Phone appointment

Plan Presentation

My Choice Design Open Studio

My Choice Design Selections

My Choice Design Electrical

Your Project Coordinator will meet you to discuss your detailed plans. At this appointment they will go through your plans and explain any questions you may have. A copy of your draft HIA contract will be given to you to go through in advance of your contract signing.

3 Planning & Building

You'll visit the MyChoice Selections Studio to finalise your colour for your home. This is an all day appointment to choose all interior and external colour choices, as well as fixtures and fittings.

Another visit to the MyChoice Design Studio, this time to decide the positioning of lights, switches and power points and to select any additional electrical items.

In this Open Studio appointment you will meet your MyChoice Interior Design Consultant to discuss any pricing upgrades you may be

considering for the interior and exterior design of your home.

Building

STAGE 1

STAGE 2

STAGE 3

STAGE 4

STAGE 5

STAGE 6

STAGE 7

STAGE 8

Frame Wall frames and roof trusses are installed – your home is now visibly taking shape.

Practical Completion The finishing touches – painting, wall and floor tiling, electrical and plumbing installations will be completed. Shower screens, mirrors and splash back are installed. You’ll be contacted to organise a pre-handover inspection. Final progress payment is due.

Ocial Key Handover After the final payment is cleared, we’ll schedule an appointment to handover the keys to your new home!

Slab Site excavation, under slab draining, concrete or screw piering and pouring of concrete slab

Brickwork & Roofing The brickwork, roof covering, plumbing and electrical rough-ins and eave linings are all installed. You’ll be contacted to carry out a pre-lining inspection.

Linings, Kitchen & Tiling Time to move indoors as plasterboard linings are

Service & Warranty Wilson Homes will be in contact 3 weeks after handover to discuss our warranty program.

Site Start Within 20 days of receiving the green light and all of the conditions of the contract

installed, timber skirting and architraves are completed and the kitchen is installed. A meeting will be organised to discuss tiling. Fourth progress payment is due.

being met, we will commence work on your site.

is completed. First progress payment is due.

Second progress payment is due.

Third progress payment is due.

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Snap Shot

1 Finance

Your Smart Start Mentor will: ▶ Give you an overview of the First Start program ▶ Introduce you to your Smart Start Home Loans Specialist

Your Smart Start Home Loans Specialist will show you:

They will then: ▶ Commence your home loan application ▶ Issue a pre-approval certificate based on your borrowing capacity ▶ Complete all aspects of Step 1 of the First Start program with you ▶ How much you can borrow and, if necessary, how to increase your borrowing power using our exclusive Deposit Starter program ▶ Dierent finance options ▶ The total finance costs to build ▶ Which government grants you’re eligible for and how to access them

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Admittedly, the first step to home ownership isn’t the most exciting but it’s vitally important to get it right. You need a clear idea of your financial situation, so you can decide exactly what sort of home you can build and where.

Buying your first home is exciting but can also be overwhelming, which is why you need the right advice from the start.

The six most important things you need to know are:

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How much deposit you’ll need to get the home you want in your ideal location

You will now complete the Finance Fit Program

How much you can borrow

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ALL of the costs involved in purchasing a home

Which government grants you’re entitled to

How to apply for a home loan

In this section, we’ll work with you to cover o each of these key points.

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How much deposit do I really need?

How much can I borrow?

Strengthen Your Position with Finance Fit.

Before you apply for a loan, we'll work with you to ensure your financial position is as strong as possible, so your application passes with flying colours! Finance Fit is an easy-to-follow program which reviews your monthly expenses, including short term debt, to determine exactly what you'll have left over each month.

When it comes to a deposit, bigger is definitely better. In an ideal world, you shouldn’t borrow more than 80% of the property’s value. That way,

There are ways to increase your borrowing capacity and secure a better interest rate on your home loan. The most obvious are increasing your income (if possible) and reducing your debts. Having a great long-term rental history can also help. If your parents have a lot of equity in their home or an investment property, they may help you out by going guarantor on your loan. If they oer their property as additional security for the lender, you’ll need less deposit and can secure a better interest rate. personal loans, lines of credit, etc.) and employment stability, including how long you’ve been with your current employer. There are lots of factors lenders may consider when assessing your borrowing capacity. They include your income, current debts (credit cards, When deciding how much you’d like to borrow, take into (realistic) account all your living expenses, so you can get a clear idea of how much you can commit to your mortgage. Don’t forget to estimate things like council rates, utilities and transport costs once you’re living in your dream home. You may find the lender is willing to give you a bigger mortgage than you imagined. In this instance, it’s important for you to decide exactly how much you’re comfortable with and what level of commit- ment to your mortgage repayments will allow you to still do some (or all) of the other things that make life fun.

you avoid paying Lender’s Mortgage Insurance (LMI).

If you need to consolidate and repay short-term debt, the Finance Fit debt reduction program, which runs over a maximum of six months, will show you how. The Finance Fit guide to budgeting will address any weaknesses in your financial profile so your application is significantly more appealing to lenders. Once you have

that in order, you can move on to our Deposit Starter program which will accelerate your savings scheme and get you in your dream home in the shortest possible time. If your finances are already in order and you have enough deposit, you can move straight onto Step 2 of the Smart Start program in the perfect, financially fit position.

However, most first home buyers don’t have a 20% deposit, so your Smart Start Home Loans Specialist will look at other competitive loan options you can access with a smaller deposit. It’s possible to buy a home with as little as 5% deposit, but it will usually mean a higher interest rate, at least in the short term.

HANDY HINT

LMI is insurance for the lender in the event you default on your repayments and the property has to be sold to recover the outstanding debt. LMI is not transferable, so if you refinance your home loan later on and the loan is still greater than 80% of the property value, you’ll need to pay LMI again. If your deposit is less than 20% of your property’s value, you’ll need to pay a one-o fee for Lender’s Mortgage Insurance (LMI). This fee is calculated on the property value and how much deposit you have.

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It’s important to know ALL of the costs involved in buying a home and budget accordingly. They include: What costs do I need to budget for?

Which government grants can I access?

Depending on where your new home is, you may be entitled to a range of government grants and/or concessions, including reductions in stamp duty. It’s important to be sure of what you can access, as these funds can significantly boost your deposit and bring your home ownership dream closer to reality.

Each state and territory has dierent grants and conditions and as you’re building your first home, you’re more likely to qualify. Your Smart Start Home Loans Specialist will help you work out if you’re eligible, explain how to apply for the grant/s and see if you can access any other benefits.

Transfer Duty and GST: Transfer duty is a one-o cost state (or territory) tax which applies to all property purchases. Transfer Duty is sometimes referred to as Stamp Duty. The amount of Transfer duty varies, depending on whether the home is for you to live in (owner occupied) or is an investment, where the property is located and the purchase price. As a first home buyer, you may be eligible for a Transfer Duty Concession – this also depends on which state you’re purchasing in and other criteria. How stamp duty is calculated varies depending on whether you’re purchasing vacant land to build your home or buying an established property. Your Smart Start Loan Specialist will help you determine how much Transfer Duty you’ll need to pay. Legal and Conveyancing Fees: You’ll need a solicitor or conveyancer to handle the legal transfer of the property into your name. They can also review the sale contract and mortgage documents and explain the terms and conditions. They will assist with transferring your new property into your name. Finance Establishment Costs: Your lender may charge you an application fee, valuation fee, lender’s solicitor fees and/or a settlement fee, as well as LMI if you borrow more than 80% of the property’s value. It’s essential to understand up front what the establishment fees are and when they are payable. Along with having access to a range of low rate, low fee loans products through their panel of Australia’s most respected lenders, a Smart Start Loans Specialist will help you determine all costs involved and how to minimise them if possible. Utilities and Household Bills: Don’t forget to budget for services such as water, electricity, gas and internet, along with other everyday expenses, including travel from your new location.

Ongoing Fees: We will walk you through your loan structure and discuss any ongoing monthly or annual fees and what happens if you make any changes to your loan in the future. Building Insurance: It’s usually a condition of your mortgage agreement to have enough insurance to cover the repair or rebuilding of your home if it suers structural damage. We will discuss the minimum amount you need to insure the building for – it’s usually noted on their valuation report. Prior to settlement, your lender will need a copy of the Certificate of Currency from your insurance company with the lender noted as an interested party. Optional Insurances: When you move into your new home, it’s a good idea to take out Contents Insurance to cover theft, loss or damage to the contents of your home (including fixtures and fittings, as well as your personal possessions). Many homeowners combine their home (building) and contents insurance into a single policy. You may also like to consider Mortgage Protection Insurance which protects you against defaulting on your loan by covering your mortgage payments in case of illness, injury or job loss. This is a personal insurance for you and should not be confused with LMI which only covers the lender if you default on repayments. Council Rates: Rates are based on land values and are levied by your local council, usually every three months. These rates are used to pay for local services and to maintain public spaces and infrastructure in your area. When you purchase a property, you’re responsible for paying the property rates from the date of settlement.

The First Homeowner Grant (FHOG):

Your Smart Start Home Loans Specialist will help you arrange this during your loan application. You cannot qualify for the FHOG if you’re buying an existing home unless it’s never been lived in before.

The FHOG is a national scheme aimed at helping new borrowers get onto the property ladder by osetting the eect of GST on home ownership. A national initiative, it’s funded and administered by the states and territories, and subject to their respective legislation.

First Home Buyer Assistance Scheme:

This scheme entitles first home buyers to a concessional rate or complete exemption on their Stamp or Transfer Duty. It applies whether you are buying an existing home, a new home or vacant land to build your first home.

We’ll guide you throughout your purchase and loan application process to access this scheme.

First Home Loan Deposit Scheme:

Your Smart Start Home Loans Specialist will check your eligibility to access this scheme. Further information on this scheme is available from the Federal Government website: www.nhfic.gov.au/what-we-do/fhlds/

In January 2020, the Federal Government introduced The First Home Loan Deposit Scheme. This scheme is available to first home buyers who are Australian citizens and have saved a deposit of at least 5% of the home’s value. The government then guarantees the additional amount needed to reach a 20% deposit. This removes the requirement for LMI, saving you the additional costs of this insurance.

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H O M E L O A N A P P L I C A T I O N P R O C E S S

Application Stage

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As part of your application, you’ll need to supply documents which help the lender assess whether you’ll be able to make repayments on the loan amount you’re applying for. The documents required vary from lender to lender. However, to streamline the application process, it’s a good idea to gather the following documentation before you apply for any loan:

How do I apply for a home loan?

Evidence of Income: If you’re an employee, you’ll need 2 most recent payslips and your tax assessment notices for the last two years. If you’re self-employed, you’ll need to provide documents related to your own income as well as that of your business. Assets and Liabilities: To assess your financial position, the application form will request details of your assets and liabilities. Be sure to include all liabilities, as any liability uncovered after an application is received may cause an issue with non-disclosure. The lender will do a credit check so they can see your credit file which details any credit applications you’ve made. Any enquiries on your credit file that don’t appear on your liability statement will be queried, to determine whether they proceeded or remain outstanding at the time of application. You’ll also need to note an amount for ongoing living expenses, so the lender can factor this figure into the serviceability of your loan. Identification: You’ll need to provide copies of your identification, such as drivers licence, birth certificate, passport, etc., with your application. If your application is made over the phone or online, you’ll have to provide certified copies of the documents. Certified copies are photocopies which have been declared as genuine copies of the original document by a Justice of the Peace ( JP) or other acceptable certifier, such as an Australia Post representative. You’ll need to take both the original document and the copy to the certifier who will sign the copy, declaring it is a true copy of the original. Signed Contract of Sale: When building your new home, you’ll need to provide a copy of the land purchase contract, as well as the building contract and plans. Once we’ve submitted your mortgage application, the lender will check your credit history to determine if you’re a good credit risk to lend you the funds for your home purchase. We’ll need to provide them with a signed and dated privacy consent before they can conduct the credit check. Your credit history is very important to a lender. If you’ve made a number of applications for finance in a short period of time, or if

Everyone who has ever applied for finance (credit cards, phone account, interest free store purchases, personal or car loans, etc.) will have a credit history. When you submit an application for finance, the lender will check your credit history, as well as make an entry on your credit file for the amount you are applying for. The credit file will show how many applications you’ve made for credit in the last five years even if you don’t proceed with the loan applied for. After five years, the entry will drop oˆ. The credit file will also show if you’ve made repayments on time with outstanding loans or credit limits, had any defaults for not meeting repayments within 60 days of their due date, as well as bankruptcy history, if applicable. HANDY HINT Whenever you apply for credit an entry is made on your credit file.

When looking for a loan, you’re going to come across terms such as: fixed, variable or split loans; introductory rates and comparison rates; repayment schedules and loan terms; principal and interest or interest only; redraw and oˆset facilities. It may all seem confusing, but your Smart Start Home Loans Specialist will talk you through each option and work with you to tailor a solution to your needs.

There are four main stages in the home loan application process:

Application

Conditional or Pre-Approval

Unconditional or Formal Approval

Settlement

you have a history of defaults or late repayments, you’re unlikely to be approved for a standard loan. If you have a particularly bad credit history, you may be unable to get a home loan. Ensuring you pay your debts on time and being selective when it comes to applying for finance will assist with improving your credit profile and ability to obtain the loan you require.

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H O M E L O A N A P P L I C A T I O N P R O C E S S  C O N T I N U E D 

Formal or Unconditional Approval

Conditional or Pre-Approval

When all conditions have been met under the lender assessment, your home loan will be approved unconditionally.

Once your loan application has been assessed , and you have enough of a deposit to proceed, we can apply for a conditional approval (also known as a pre-approval).

who will arrange for you to sign and return the loan contracts and any required documents outlined in the lender’s formal approval. The quicker you review and sign the documents, the sooner your loan will be settled. Once you’ve signed the documents, your conveyancer will liaise with the lender’s solicitors to book a day for settlement of the loan.

This means your loan has been formally approved and you can move towards settlement on the property. If you have a finance clause in the sale contract, formal approval means you’re now commit- ted to purchasing the property. Your lender will instruct their solicitor to prepare the loan contracts which will be forwarded, along with other required documents, to your Smart Start Home Loans Specialist

factors. The value will be based on comparable sales in the area and the condition of the property. The valuation report is not provided to you as the purchaser, as it is conducted for the lender, even though you may be charged for it. You can, however, arrange a valuation yourself. Some lenders may not require a physical valuation and may instead do a desktop or online valuation through assessing available market sales and suburb >Page 1 Page 2-3 Page 4-5 Page 6-7 Page 8-9 Page 10-11 Page 12-13 Page 14-15 Page 16-17 Page 18-19 Page 20-21 Page 22-23 Page 24-25 Page 26-27 Page 28-29 Page 30-31 Page 32-33 Page 34-35 Page 36-37 Page 38-39 Page 40-41 Page 42-43 Page 44-45 Page 46-47 Page 48-49 Page 50-51 Page 52-53 Page 54-55 Page 56-57 Page 58-59 Page 60

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