Article by: Hari Yellina (Orchard Tech)
The government of Australia has announced that it is reactivating two buyer major schemes as it welcomes the new financial year. However, there are many questions being raised about these schemes. Under this scheme, COVID 19 affected patients are eligible to retrieve approximately $10,000 more from their superannuation. Moreover, the second round of the First Home Loan Scheme has also begun. It has been witnessed that more than 10,000 areas have become available with a mere five percent deposit.
According to recent data, it has been recorded that 2.4 million Australian citizens have already applied to access their super. Thus, if averaged, this amounts to $7,492 per person. Currently, all individuals are eligible to retrieve $10,000. However, this makes little sense if thought through a financial point of view. For instance, any individual claiming $10,000 in the current times will have subtracted $21,516 from their retirement funds. Thus, practically these schemes need to be carefully applied.
Hence if anyone is considering gaining access to their super they should:
1. Be fully aware if they meet the criteria. If anyone misjudges their eligibility, then they will be fined up to $12.600.
2. Rely upon an experienced financial advisor for professional advice.
3. Reinsert the retracted money into the super as soon as possible.
4. Spend the drawn money wisely as these dollars will later affect the future.
Recently, the government has made available 10,000 more areas that are available in the First Home Loan Deposit Scheme. This scheme allows 27 lenders and four banks to let first time home owners to take out a mortgage with only five percent deposit. They also are not required to pay any lender’s mortgage insurance. However, buying a house under this scheme can actually be more expensive. For instance, with this heftier loan, an individual is required to pay $395 dollars more in interest.
Here are some pros and cons that come along with this scheme: