Hi, we're Melbourne residents looking to buy our first home. We saw an apartment and we have 20% deposit. However, we found out that the property is leased til June 2018. Some lenders said they only approve if the property has under 6 months of lease left. One lender agrees to approve our loan but in investor's rates until we take over the property in June 2018, then they will convert to owner occupier rates. Is this legal? Also, do we still get stamp savings as first home buyers if we proceed?

Hi Fae

Given the property is going to be an investment property at settlement, the lenders will regard it as an investment loan and therefore you will have the higher investment rates. However, normally the banks will let you switch back to owner-occupied after a 6 or 12 month period (depending on the lender) if you can demonstrate that you have actually moved into the property at a later stage. This is entirely legal as it is up to the lender to decide their own rules as to when they will allow people to switch.

In terms of stamp duty for first home owners, in Victoria the requirement is normally that you intend to live in the property for at least twelve months starting within twelve months of when you buy the property (i.e. it doesn't have to be from day one). If you can move in by June 2018, there should generally be no problem.

If you wanted to discuss in more detail, feel free to send me your contact details through here or come to our website at mortgagedirect.com.au and start a chat with me.

Cheers
Dean

Hi Fae
Yes it is legal to do the investment loan to start with as you will be receiving rental income, then switch to Owner Occupied rates when you move into the property. With regards to stamp savings for First Home buyers, as far as I know, the property would need to be your principal place of residence from the time of purchase in order to receive any discounts, however it would be best to confirm this with your conveyancer as I'm unsure as to whether or not there is a way around this given the circumstances.
Kind Regards
Caroline Pollard

There is an exemption for stamp duty up to $600,000. That applies by the same criteria I mentioned before, which is that you live in the property within 12 months for a minimum of a 12 month period. If the property is worth more than $600,000, you’ll pay some stamp duty up to $750,000 when the stamp duty becomes normal.

If you would like to discuss this further, please call me on 0410 623 444.

Cheers
Dean