Latest news with #firsthome
Yahoo
5 days ago
- Business
- Yahoo
5 Reasons First-Time Homebuyers Should Consider a Personal Loan
Buying a first home is exciting yet daunting. Many people conduct thorough research and prepare in advance; they save enough for the down payment, determine their budget and even narrow down their preferred location. But when it comes to the mortgage, people often think that's the only option to finance their home. Read Next: Find Out: While a mortgage will still cover the bulk of your home purchase, a personal loan could help fill the gaps most first-time buyers don't anticipate. Here are five overlooked reasons first-time buyers could consider a personal loan, including what it can provide as they prepare for a thrilling new chapter. Cover Unexpected or Underestimated Costs It might not be your first thought, but a personal loan can offer helpful flexibility in covering closing costs, inspection fees, moving expenses and even initial utility setup costs. These are often overlooked during first-time home budgeting, but with a personal loan, you could have access to funds to use just for these must-haves. Ultimately, buyers could prevent financial stress and protect their emergency savings. Be Aware: Strengthen an Offer in a Competitive Housing Market Having a personal loan can provide fast access to funds for related homebuying expenses, allowing buyers to act quickly in a fast-paced housing market. This flexibility could help with things like larger earnest money deposits or pre-move-in repairs, which can strengthen buyers' position without them having to touch their savings. Avoid Draining Long-Term Savings There's nothing worse than having to dip into funds that are saved for other purposes. Using retirement funds or large portions of savings can create long-term financial strain and put first-time buyers in a tough spot. That's why a personal loan could be beneficial. Buyers could preserve their financial safety net and still cover the necessary upfront expenses with ease. Fund Immediate Repairs or Renovations Want to make some alterations to the home? Have some repairs that can't wait? With a personal loan, buyers could handle repairs that a seller typically wouldn't cover, or they can easily make updates before moving in. Unlike home equity loans, personal loans don't require existing equity or a home appraisal, so first-time buyers could get enough money to make their new home just as they'd like before bringing in their belongings and furniture. Improve Credit Profile Before Mortgage Application For those eager to get a mortgage, personal loans could help consolidate high-interest credit card debt, improving the debt-to-income ratio and credit mix. This may boost mortgage approval odds, but it's crucial to time it right and speak with a financial advisor before taking on new debt. Smart, Flexible Support for Your First Home Purchase Personal loans might not be for everyone, but they can be a smart, flexible option for first-time homebuyers who face cash flow gaps that prevent them from getting a home. Before settling on a personal loan, buyers should be sure to do their research, compare lenders, check their credit score and make sure their potential loan fits into a realistic, well-planned budget. More From GOBankingRates 6 Popular SUVs That Aren't Worth the Cost -- and 6 Affordable Alternatives This article originally appeared on 5 Reasons First-Time Homebuyers Should Consider a Personal Loan Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Daily Mail
12-07-2025
- Business
- Daily Mail
How to help your grandchild buy their first home without landing them with a huge tax bill – these are the little-known inheritance tax pitfalls you must avoid
Forget the bank of mum and dad – it's now grandparents who are dipping into their savings to help their grandchildren buy their first home. As house prices continue to soar and wages remain stagnant, more are stepping in to support the younger generations, handing over tens of thousands of pounds as early inheritance gifts.
Daily Mail
01-07-2025
- Business
- Daily Mail
How Lifetime Isas work: Compare providers and answer these questions before opening an account
A Lifetime Isa – or Lisa – gives you the ability to save up to £4,000 a year, with the Government topping up contributions by 25 per cent. It's designed to help you save for two scenarios only: buying your first home and retirement. You can potentially bag a total of £32,000 from the Government if you max out your contributions each year between the age of 18 and 50, the age at which you stop earning the Lifetime Isa bonus. The Government bonus sounds like a big giveaway, but there are a few things to consider before opening a Lisa. First, Lisas have sparked criticism amid fears they will encourage younger savers to shun pensions. For many, especially those with a work pension where their employer matches their contributions, pension saving is still a better deal and their Lisa should be supplementary to that. Lisas have also been under fire because the property you buy must cost less than £450,000. This level has stayed the same since the Lisa's introduction in 2017, despite house prices increasing over that time. Finally, there is a financial penalty if you withdraw money for any reason other than those stated. But in general, Lisas are a useful option for a specific group of people – those under 40 who are saving a deposit for a first home and meet the qualifying criteria. Here we look at how Lisas work, what types of products are available, and their benefits and pitfalls. We also examine which providers are on the market, giving you options for both a cash Lisa and a stocks and shares Lisa. What is a Lifetime Isa? A Lifetime Isa is a type of Individual Savings Account that's specifically designed to help younger people save for their first home or for retirement. The £4,000 you can save each year in a Lisa forms part of your overall £20,000 Isa allowance. The main draw of Lisas is the 25 per cent Government bonus on contributions. However, the accounts have stricter eligibility criteria and rules around what you can use your money for than other Isas. Eligibility Everybody aged 18-39 can open a Lifetime Isa. This includes those who already own a home and are saving into a pension, though the money can't be used for a house purchase unless you are a first-time buyer. You can pay into a Lisa until you're 50, meaning savers can potentially earn a total of £32,000 from the Government by stashing away £4,000 a year from the age of 18. Your account stays open after you turn 50, and your savings can continue to earn interest or achieve investment returns, but you can't make more contributions. If you are using a Lisa for retirement, you can only withdraw money once you reach the age of 60. If you're buying a home with someone else who meets the criteria, you can both use the Lifetime Isa for the purchase – giving you more bonus. Rules around accessing money You can only use the money when buying a first home worth up to £450,000, or for retirement when you reach 60. If you need to withdraw for other reasons, you're hit with a stiff 25 per cent penalty affecting your own contributions and not just the Government bonus. There's no withdrawal penalty if you're terminally ill with less than 12 months to live. Other good-to-knows Both cash Lifetime Isas and stocks and shares Lifetime Isas are available. You can hold multiple Lifetime Isas, but you can't deposit money into more than one in each tax year. The £4,000 maximum you can pay into a Lifetime Isa counts towards your annual £20,000 Isa allowance. If you have a Help to Buy Isa and a Lifetime Isa, you can only use the bonus from one to buy a house – but note that Help to Buy Isas are closed to new savers. What are the rules when buying a home using a Lifetime Isa? In our view, Lifetime Isas are best for first-time buyers who are definitely going to buy a property in the next few years. If you're considering opening a Lifetime Isa for this reason, you should be aware of the rules and eligibility criteria. For instance, you must be a first-time buyer. You can also buy with another first-time buyer and both use a Lisa and its bonus. It's possible to buy with someone who isn't a first-time buyer and use your Lisa, although they can't use their own Lisa if they were to have one. The property must cost less than £450,000 and the Lisa needs to be open for at least 12 months before you can use it for the purchase. You can't have previously owned a property, in the UK or anywhere else. It's worth noting that the property you purchase must also be in the UK. The scheme isn't for those purchasing a buy-to-let or holiday home – you must be buying a home you plan to live in. Finally, you have to be buying the property with a mortgage. How to access the money for a house deposit When you eventually buy a property, don't just withdraw the funds, because that will result in a penalty. Instead, the solicitor handling your purchase should deal with withdrawing the money. You'll need to tell them you're using a Lisa to buy the property. You can use the money towards the deposit when you exchange contracts prior to completion, although there can't be a delay of more than 90 days. If the sale falls through, your solicitor will be able to put the money and bonus back into your Lisa – though it must be the same amount. What Lifetime Isa providers can you choose from? Lifetime Isas can boost savers' pots, but in practice there aren't many providers on the market. This is particularly true of cash Lifetime Isas. Larger banks generally don't offer them, meaning cash savers can choose from a small group of less well-known providers. These include Moneybox, Paragon Bank, Plum and Tembo. The best cash Lifetime Isa provider by rate is currently Plum*, which is offering savers 4.75 per cent interest – although this rate drops by 1.14 per cent after 12 months. A dearth of products could pose problems for first-time buyers with a shorter time horizon. Investing is for the long term – the usual rule of thumb is a minimum of five years – so an investment Lifetime Isa probably isn't the right choice if you want to buy a home sooner than that. Compare stocks and shares Lifetime Isa providers Those interested in stocks and shares Lifetime Isas can choose from more recognisable names than cash savers. Providers include AJ Bell, Hargreaves Lansdown, Moneybox and Nutmeg. For do-it-yourself investors: AJ Bell You can open an AJ Bell Lifetime Isa* with a minimum of £250 or by setting up a monthly direct debit of at least £25. AJ Bell charges 0.25 percent annually on your investments. For shares, investment trusts, Exchange Traded Funds (ETFs), gilts and bonds, this charge is capped at £3.50 a month. In terms of trading fees, AJ Bell charges £1.50 for fund dealing and £5 for shares dealing. If you'd prefer to have your investments managed, you can choose one of AJ Bell's own ready-made portfolios. Just check the underlying ongoing fees for these funds. Hargreaves Lansdown You can open a Hargreaves Lansdown Lifetime Isa* with a minimum lump sum investment of £100 or by setting up a minimum monthly payment of £25. Investors pay an annual fee of 0.25 per cent on the first £1million held in funds, 0.10 per cent on the value between £1million and £2million and nothing on anything above that. There's no dealing charge for buying or selling funds. For shares, investment trusts, ETFs, gilts and bonds, the 0.25 per cent charge is capped at £45 per year. There are dealing charges, starting at £11.95 a deal if you make less than nine deals a month. You can invest in the shares, funds or trusts you like. If you prefer a more hands-off approach, you can pick one of Hargreaves Lansdown's ready-made Isa portfolios, tailored for different investment needs. Be sure to check any ongoing charges within the investments themselves. For hands-off investors: AJ Bell Dodl Dodl is AJ Bell's app for less experienced investors. You can open an Dodl Lifetime Isa account* with £100 or a £25 monthly direct debit. The range of investments is more limited than its full investment platform, but it still gives you more choice than other hands-off platforms. You can go for one of AJ Bell's seven ready-made portfolios, a selection of ETFs that track a market sector or investment theme, or pick from 80 shares available through the app. Dodl's account charge is low at 0.15 per cent, but be sure to check charges for the underlying investments. AJ Bell's own funds have ongoing charges of 0.31 per cent. Dodl offers a very competitive 4.32 per cent interest on cash held in your account. Moneybox Moneybox aims its Lifetime Isa at those saving a deposit for their first home, rather than targeting people investing for retirement. When you sign up, Moneybox offers you a choice of three risk-rated portfolios – cautious, balanced and adventurous. Moneybox gives you exposure to cash, global equities and global property equities through these funds. You can start investing with just £1. It charges £1 a month to cover transaction fees and also has a platform fee of 0.45 per cent. Investors pay fees for the tracker funds on top of this, with ongoing charges ranging from between 0.11 and 0.18 per cent per year. Nutmeg Nutmeg's Lifetime Isa has a minimum lump sum requirement of £100. You choose an investment style and risk level and then Nutmeg manages your portfolio for you. Make sure you check Nutmeg's fees. As a service that manages your investments, fees can be relatively high. For its actively managed investment styles, Nutmeg charges 0.75 per cent annually on up to £100,000 of investments and 0.35 per cent on the portion above that. Keep in mind there are also underlying fund costs. OneFamily You can open OneFamily's Lifetime Isa* with a minimum £250 lump sum investment or £25 a month direct debit. There are two fund choices. Global Equity is for investors willing to take on slightly more risk for potentially better returns, while Global Mixed is for more cautious investors. The annual management charge for these funds is high at 1.1 per cent. However, this is the only fee that OneFamily charges, making it more straightforward to understand. Is a Lifetime Isa worth it? Lifetime Isas are usually worth it for first-time buyers who know they'll definitely be purchasing a property in the next few years, and that the property will cost less than £450,000. This cohort stands to benefit the most from using the account, because the generous 25 per cent Government bonus can help them save for a deposit quicker than they may have otherwise been able to. It's a less useful account for saving for retirement. You must stop paying into it at 50, but you can't access it until you're 60 – so you'll miss out on 10 years' worth of saving. If saving into a Lisa means opting out of a workplace pension or missing out on employer contributions, the first port of call should be auto-enrolling to the pension and maximising employer contributions. However, a Lisa could still be worth it when used in combination with other accounts. And if you're part of a group that won't get employer contributions to a pension, such as the self-employed, the Government bonus is one way to receive a similar top-up. > The best mortgage rates for first-time buyers How to decide whether a Lifetime Isa is worth it for you There are many factors to consider when deciding whether to open a Lifetime Isa – and the drawbacks can outweigh the advantages for some people. Ask yourself the following questions when considering a Lifetime Isa: Do you think you'll need to withdraw money in an emergency? Lifetime Isas are not a good choice if you need easy access to your money. You'll lose a quarter of your savings when withdrawing, including from the bonus and any interest or investment growth you've built up. That's a hefty loss, so you need to be sure you can lock up your money until you buy a home or retire. Do you know how much you'll need to save for a home deposit? If you want to save for a home using a Lifetime Isa, you should know what sort of property value you'll be considering. Firstly, you can only buy a property worth £450,000 or less, which is potentially an issue in pricier locations such as the capital and for those who need a larger than usual first home, for example if they have a family. Secondly, it helps you plan how much to save in a Lifetime Isa. Any excess funds beyond your deposit will remain in the account, which you won't be able to access until you're 60 without penalty. Are you maximising employer contributions into a workplace pension? After you've bought a home, the Lifetime Isa turns into an inferior retirement product when compared with saving in a workplace pension. Auto-enrolment rules mean employers have to pay into your pension. Some employers go beyond the minimum they must contribute, matching your own contributions up to a certain amount. If saving in a Lifetime Isa means you're not squeezing the maximum contributions possible out of your employer, you're forgoing free money. The Lifetime Isa is only a decent retirement savings vehicle for the self-employed, who don't receive employer contributions towards their pension. Are you planning to use a Lifetime Isa within the next five years and are you ready to invest? If you're planning to buy a home within five years, it makes sense to open a cash Lifetime Isa and grab any bonuses during that period. Any period shorter than this is less than the timescale financial advisers traditionally recommend for investing over saving. But stick with cash for any longer than that and you're missing the opportunity for better returns. The hard work and risks of investing are practically invisible to people saving into workplace pensions. The vast majority are in a default fund, and don't have to think much about how their investments are managed. If you intend to hold an investment Lifetime Isa, you'll have to be more proactive and knowledgeable. Even when choosing a do-it-for-you platform such as Nutmeg, you should research its different investment approaches and think about how much risk you want to take. Many financial experts think one of the biggest risks of the Lifetime Isa is that young people will simply open a cash version and stick with it, potentially losing thousands of pounds of investment returns over the decades. That's on top of missing employer contributions into a pension, if they hang onto their Lifetime Isa as a retirement product after buying a home. Might you need to fall back on benefits at any point in your life? Lifetime Isa savings will be taken into account if you ever need to claim benefits, but pension savings are not included in the assessment. If you are in a weak financial situation or in the kind of precarious employment where you might have to rely on state benefits at some time in the future, any savings you build up will be protected in a pension pot. What income tax rate are you on? The Government pays tax relief on contributions to pension pots, in line with the principle that we all save for retirement out of untaxed income. It does this based on income tax rates of 20 per cent, 40 per cent or 45 per cent. So if you earn too little to pay income tax or are on the basic rate of 20 per cent, the Lifetime Isa bonus is a fair deal, especially if your primary goal is to buy a home. But if you are on the 40 per cent or 45 per cent rate, you will get more money from the Government if you stick with saving into a pension. Your Lifetime Isa fund will be tax-free when you eventually withdraw it, but your payments into the pot come from taxed income. The Lifetime Isa bonus evens the field for basic rate taxpayers, but not for those on the higher rates. With pensions, higher rate taxpayers get an extra boost at the outset from more tax relief - increasing the size of the initial fund which then benefits even more from investment compound growth. Pension withdrawals will be taxed as income in retirement, but many people end up on a lower rate in retirement than when they were earning a salary, so the overall system works in their favour. Compare the best DIY investing platforms Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you. When it comes to choosing a DIY investing platform, stocks & shares Isa, self invested personal pension, or a general investing account, the range of options might seem overwhelming. > This is Money's full guide to the best investing platforms Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. When weighing up the right one for you, it's important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs. We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide to the best investment accounts. DIY INVESTING PLATFORMS AND STOCKS & SHARES ISAS Admin charge Charges notes Fund dealing Standard share, trust, ETF dealing Regular investing Dividend reinvestment AJ Bell* 0.25% Max £3.50 per month for shares, trusts, ETFs. £1.50 £5 £1.50 £1.50 per deal More details Bestinvest 0.40% (0.2% for ready made portfolios) Account fee cut to 0.2% for ready made investments Free £4.95 Free for funds Free for income funds More details Charles Stanley Direct * 0.30% Min platform fee of £60, max of £600. £100 back in free trades per year £4 £10 Free for funds n/a More details Etoro* Free Stocks, investment trusts and ETFs. Limited Isa, no Sipp. Not available Free n/a n/a More details Fidelity * 0.35% on funds £7.50 per month up to £25,000 or 0.35% with regular savings plan. Free £7.50 Free funds £1.50 shares, trusts ETFs £1.50 More details Freetrade * Basic account free, Standard with Isa £5.99, Plus £11.99 Stocks, investment trusts and ETFs. No funds Free n/a n/a More details Hargreaves Lansdown * 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 Free Free More details Interactive Investor* £4.99 per month under £50k, £11.99 above, £10 extra for Sipp Free trade worth £3.99 per month (does not apply to £4.99 plan) £3.99 £3.99 Free £0.99 More details InvestEngine * Free Only ETFs. Managed service is 0.25% Not available Free Free Free More details iWeb Free £5 £5 n/a 2%, max £5 More details Trading 212* Free Stocks, investment trusts and ETFs. Not available Free n/a Free More details
News.com.au
29-06-2025
- Business
- News.com.au
Greenvale family home sold to first-home buyers at auction
A young Greenvale family has sold their first home under the hammer for $850,000, handing it over to a pair of first-home buyers after nine years of ownership. Sellers Ryan and Michelle Sacco bought 32 Ventura Way as first-home buyers and raised two children in the house, which features a contemporary design, open-plan living and a low-maintenance backyard. 'Honestly, it was just the design of the house,' Mr Sacco said. Tragic side of Aus housing crisis exposed 'It had a really modern, smart layout that just worked, the moment we saw it, we could picture ourselves living here.' The home became the heart of their family life, with the lounge room a particular favourite. 'That was our go-to space — open, bright, and perfect for spending time together as a family,' he said. 'It's been perfect. We raised both our kids here, everything about the house just suited our needs as a young family.' 'One memory that stands out the most is probably just the kids playing in their bedrooms when they were little. Those early years, hearing them laugh and run around, that sticks with you.' The couple said the sale marked a 'bittersweet' moment as they prepare to upsize. 'It's our first family home, and that's always going to be special,' Mr Sacco said. 'But mostly, we're just happy. Happy we had the chance to enjoy it, and now someone else will too.' The successful buyers, Olga and Guiseppe, were attending their first auction after recently securing permanent residency in Australia. Olga is originally from Russia and Guiseppe from Italy. 'It was our first auction and our last auction,' Olga said. 'We are shocked and very excited. 'We saw so many people at the auction and everyone was bidding, so we thought we might be in trouble, but it worked out very well for us.' Ray White Gladstone Park director and auctioneer Malek Younan said the home attracted 61 buyer groups over a shortened three-week campaign, with five active bidders on auction day. 'Bidding opened at $700,000 and it came down to two bidders fighting it out at the end,' Mr Younan said. 'The winning bid went to a lovely couple of first home buyers.' Mr Younan said the home's single-level layout and quality finishes appealed to a broad range of buyers. 'It was especially attractive to first-home buyers and downsizers looking for low-maintenance living close to transport, parklands, and still with space to entertain,' he said. The Ray White Gladstone director added that confidence had returned to Melbourne's outer north. 'Sydney and Queensland had their run, now it's Melbourne's time to shine again,' he said. 'We're overdue for a rebound, and Greenvale is leading the charge.'
News.com.au
24-06-2025
- Business
- News.com.au
Housing concession wars: Aus ‘most attractive' handout revealed
In a daring move, an Aussie state is shaking up the housing concession wars, giving the 'most attractive in the nation' chance to house hunters to buy their first home. The move, announced in the Queensland budget by treasurer David Janetzk on Tuesday, has seen wide support from real estate lobby groups in the first LNP state government budget here in a decade. All the tax write offs Aussies can claim The scheme will allow 1,000 buyers to land their first home off just a 2pc deposit as part of a $165m 'close the deposit gap' program, with the government sharing the equity load up to 30pc for new homes and 25pc for existing homes - and access expanded for workers that earn up to $150,000 or couples bringing in up to $225,000. The program - which opens for expressions of interest in a week (July 1) - covers properties up to $1m across Queensland to take into account record price surges since the pandemic - a threshold that's $250k jump on what LNP campaigned for during the election period. Given the government expects to raise over $45b in taxes from the property sector over the next four years, Real Estate Institute of Queensland head Antonia Mercorella came out in support of the initiative as well as future reform. 'With suitable income eligibility thresholds of up to $225,000 for couples and $150,000 for singles and a statewide property value cap of $1m, the scheme reflects modern property prices across Queensland and makes it the most attractive in the nation.' MORE: Cash-strap student turns $40k to 38 homes Govt pays $3.3m for unliveable derelict house Property Council Queensland executive director Jess Caire also welcomed the move to a more housing focused budget. 'Responding to the housing crisis is clearly a focus of this budget with significant spending allocated towards creating new supply, community housing and helping first home buyers get their foot in the door of the housing market,' she said. 'The $165m Boost to Buy scheme was an ask in our 2024 Be a Queenslander election campaign and an initiative that will help many Queenslanders realise the dream of home ownership.' Ms Mercorella said Brisbane local government area median house prices had already passed the million-dollar median mark, while Greater Brisbane was close, with units also surpassing the $700,000 level across the Gold and Sunshine Coasts. 'The generous cap ensures the scheme is relevant in all corners of our state including high-demand areas like Brisbane, the Gold Coast, and Sunshine Coast, where the median house price now sits above $1m. Without this adjustment, the scheme risked being out of touch with the reality faced by many first home buyers today.' She did not expect the program to distort property demand given FHBs made up a small share of overall market activity, but said it 'may assist in rebalancing housing pressure by helping some renters transition into ownership'. 'I don't think we can underestimate the material impact this can have on thousands of lives and for generations to come.' Among the areas still on REIQ's wishlist for the state was stamp duty reform in favour of a land tax-based model, and abolishing stamp duty for downsizers over 55. 'We've seen a promising start with some relief for first home buyers through higher stamp duty concession thresholds, abolishment of stamp duty on new builds, and the removal of restrictions on renting out rooms, and now we'd like to see some relief extended to people at the opposite end of the housing cycle - downsizing Queenslanders.' 'We're hearing calls to remove barriers that delay older Queenslanders from downsizing – a stamp duty exemption would achieve this and also, in turn, allow younger families to upsize.'
