It appears the Federal Government will come through in assisting First Home Buyers in Australia to get into their first home quicker through the new First Home Loan Deposit Scheme (FHLDS), which launches in January 2020.
The FHLDS will allow first-home buyers earning less than $125,000 individually, or $200,000 for couples, to apply for a loan with a deposit of as little as 5% of the property price. Under the scheme, the Government will guarantee the remaining 15% of the deposit for properties priced under $475,000 in Queensland capital cities and $400,000 in the rest of the state (Each state will have their own designated price caps on properties). This means, that First Home Buyers under this scheme will no longer be required to pay for Lenders Mortgage Insurance (LMI).
The scheme will be administered by the National Housing Finance and Investment Corporation (NHFIC), meaning prospective First Home Buyers will need to lodge an application to be considered. The initial launch of the scheme has a budget capped at $500 million. Under the proposal, Finance Minister Mathias Cormann suggested that no specific number of guarantees will be allocated per jurisdiction and that approvals will be on a first-in-best-dressed basis.
What does all of this mean to First Home Buyers?
Well, it’s great news!
Providing you can qualify, and your application is selected you could be able to purchase your First Home quicker and without the large cost of LMI.
Without this scheme, a First Home Buyer with only a 5% deposit would need to pay LMI. This can be a costly expense that can be either paid for upfront or capitalised into the loan. The cost of LMI is a sliding scale based on different variables, but essentially adds thousands of dollars to the cost of the purchase.
Under the new Government First Home Loan Deposit Scheme, the Government will guarantee a First Home Buyers Loan with a lender, which means you will no longer need to pay for LMI.
What lenders will be involved in the scheme and a few other details are still pending, but it is worthwhile for First Home Buyers to keep up to date on developments that could get you into your first home much quicker.
To keep receiving information on how you can benefit from this opportunity and buy your first home quicker, take a minute to join our First Home Buyers Club on the adjacent blue form.
Purchasing your first home can certainly be exciting but obtaining a Home Loan for your First Home can be challenging and daunting, which is why our Financial Brokers are trained to eliminate the stress for you and walk you through the process step by step.
First Home Buyers may be eligible to receive the First Home Owners Grant and may also be eligible for stamp duty concessions.
Whether you are ready to purchase your First Home or if you have started discussions with your partner or family about purchasing your First Home, then you will certainly benefit from our advice on how to obtain the right loan for you.
As your broker we get paid from the lender once the loan is settled, therefore our service to you is completely FREE.
Important Factors In Preparing Your Deposit
Demonstrating to your lender that you have a good savings history is fundamental and something that should be considered early when deciding to purchase a your first home. Resulting from the Royal Commission on banking, the requirements for a first home loan have become more difficult, which is why First Home Buyers need to plan for their first home loan at least 12 months in advance.
Brisbane Home Loans Financial Specialists are happy to assist you in establishing a savings plan in preparation for a First Home Loan at a later date.
The amount of deposit available for your First Home is really important when it comes to financing. Your savings, will influence the type of loan you can get.
Most lender will require a minimum of 5% deposit. Lenders like to see this in your bank account and usually for a period of at least 3 months.
Often, First Home Buyers, will seek their parent’s assistance in purchasing their first home. Their help can be in terms of assistance with the initial deposit, alternatively they can act as a Guarantor on the Loan. As a Guarantor, your parents equity in their personal or investment property can act as security against your new home.