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Let first home buyers access super funds, lender says

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Australian Broker | 22 May 2014, 07:00 AM Agree 0
Borrowers should be able to access their superannuation to overcome the upfront costs of buying a first home, a lender believes
  • Peter | 22 May 2014, 09:44 AM Agree 0
    I can't imagine too many first home buyers with 25k in their super. Mostly the clients I have dealt with are young, meaning they have not been in the workforce long enough to build a deposit type of balance. Also, if they have to pay it back to the super fund over 15-20 years we are now banking on them having growth in the property value and not paying minimum payments? speculative outcome really. My opinion, if the government could open a department to supply LMI and reduce the fees to a decent premium that is based on risk across the quantity of LMI deals, this would be a great first step. Really, I want to be a Mortgage Insurer when I grow up. Money for jam really. In addition to this, reducing to 50% if not abolishing stamp duty for FHOG is also critical if they really want to see growth from this area of the market. My 2 cents worth.
  • Benno | 22 May 2014, 11:42 AM Agree 0
    Sometimes old fashion principals result in old fashion behavior, if first home buyers can’t save for a deposit now how are they going to afford a home loan repayment. I agree with Peter consideration to the cost issue would be more beneficial than raiding a future savings pool. And Mr Oliver if your proposal involves compulsory enforcement of the repayment then this would come at a cost to someone and it was the costs that are the problem in the fist place isn’t it?
  • John from Geelong | 22 May 2014, 01:01 PM Agree 0
    Withdrawal from super is not the correct solution but securing against your super with a withdrawal only in the event of a loss to the lender is better.
    It may need concessional treatment of additional payments to super when young to create enough value in the fund to be useful.
    Simply put, super is forced saving and should be available to support your first step into the property market.
    Some people will take advantage of the scheme but that shouldn't detract from the vast number of clients who benefit from it. It will also provide an opportunity for the plodder who always stays employed but can never manage to set aside enough for a deposit. There are plenty of people in their 30s and 40s who can't find a way in.
  • Chris | 23 May 2014, 09:31 AM Agree 0
    Super is not the answer here, FHO's generally will not have enough accumulated to access anyway.
    Abolishing the FHOG and removing the stamp duty for all buyers of residential LAND purchases only will have multiple benefits:
    1. Growth in the Building Industry and therefore employment of both skilled and non-skilled labour, this is one of the only manufacturing industries that cannot be off-shored and surprisingly not under the stranglehold of narrow minded trade unions.
    2. Reduced upfront costs and any savings actually used towards the house to reduce LMI reliance and subsequent premium gauging.
    3. To ensure foreign investment doesn't kill the market and create rental slums, Stamp duty exemption for this is for residents only as owners occupiers.
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