In the past, first home buyers with a smaller deposit had to deal with the additional cost of Lender’s Mortgage Insurance. This new scheme means that the Government will effectively as a ‘guarantor’ for the loan for buyers with between 5% and 20% deposit.
What many first home buyers in this position have overlooked, however, is that the new scheme is limited to the first 10,000 applicants per year. The First Home Loan Deposit Scheme commenced on January 1st this year, and word has it that there have already been more than 1000 applicants through the Commonwealth bank alone! With around 100,000 people buying their first home each year, it seems that this year’s allocation will be oversubscribed quite quickly, so first home buyers in Melbourne’s north-west will need to move fast if they want to secure their loan guarantee in 2020.
For those who are unaware of how the First Home Loan Deposit Scheme works, there is an income test applicable. Applicants need to be:
- Singles whose taxable income is not more than $125,000; or
- Couples whose combined taxable income is not more than $200,000.
It is also worth noting that if you are planning on purchasing your first home with another person who is not your spouse or defacto, (such as family member like a sibling or parent), then you will not be eligible for this scheme.
If you’d like to know more, you can go straight to the First Home Loan Deposit Scheme website. It is important to remember that this online tool is intended to be a guide only. It will not provide a guarantee of a loan from a participating lender.
Remember, if you need any assistance in finding the right home, whether you’re looking for your first home or your last, feel free to call our experienced team at Taylors Lakes and Caroline Springs on 9390 8333.
James Hatzimoisis & John Aaron Nakic
Directors – Barry Plant Real Estate
Taylors Lakes, St Albans & Caroline Springs