First Home Loan Deposit Scheme - More Places Now Available!
On the 1st of July 2020, The First Home Loan Deposit Scheme released another 10,000 places!
This new scheme was first released on the 1st of January 2020, with 10,000 places available. All of these places had been exhausted, and on the 1st of July another 10,000 places were released.
So what is the First Home Loan Deposit Scheme and how does this benefit you?
The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner.
Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (lenders criteria also apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
Lets look at a scenario to see the potential benefits in dollars!
How do you know if you are eligible to reserve a place under this scheme and how does it work?
There are some eligibility criteria to determine whether you are able to reserve a place.
Singles – your taxable income for the previous financial year must not be more than $125,000
Couples – your combined taxable income for the previous financial year must not be more than $200,000.
The prior ownership test requires you to not have ever owned:
a freehold interest in real property in Australia
an interest in a lease of land in Australia with a term of 50 years (or more), or
a company title interest in land in Australia.
The Scheme is only open to current Australian citizens.
If you are applying under the Scheme as part of a couple, you will both need to be Australian citizens.
The Scheme is not open for permanent residents who are not Australian citizens.
The Scheme is to assist singles and couples (together) who have at least five per cent (5%) of the value of an eligible property saved as a deposit. The 5% must be made up of genuine savings.
Price & Security
Depending on which state you live in and are purchasing in, there are property price thresholds.
In Victoria, this is a maximum purchase price of $600,000 or a maximum of $375,000 in some regional areas/non-metro areas.
The property also needs to be an eligible security under the scheme and also for the lender.
In addition to the First Home Loan Deposit Scheme, you may also be eligible for the First Home Buyers Grant AND a Stamp Duty exemption.
If you are a first home buyer and want to discuss further how this may help you and if you are eligible, get in touch today.
Your first home may be closer than you think!
*LMI may vary depending on the lender.