Qualifying for the First Home Loan Deposit Scheme

Given the amount of media coverage in recent weeks on the First Home Loan Deposit Scheme, it’s not surprising that quite a few first home buyers have been asking about how and where they can apply.

This new scheme is the Federal Government’s new assistance measure for first home buyers, and is aimed at helping those market entrants who might otherwise have been facing the additional costs of Lender’s Mortgage Insurance due to having less than a 20% deposit.

What we have noticed in talking with quite a few first home buyers recently, is that there seems to be quite a lot of people who are confused about how this new scheme works. The good news is that a new online tool is now available to assist first home buyers to understand their eligibility for the new scheme.

This new website has been launched by the National Housing Finance and Investment Corporation, which is a Federal Government body that aims to improve housing outcomes in Australia, with a particular focus on affordable housing.

The First Home Loan Deposit Scheme includes an income test, as it is aimed at assisting:

  • Singles whose taxable income is not more than $125,000; or
  • Couples whose combined taxable income is not more than $200,000.

There are several criteria used to determine who is eligible to apply for the new scheme. Key questions on the website that applicants will be asked include:

  1. Confirming your income;
  2. Establishing your age;
  3. Confirming this is your first property ownership;
  4. Meeting the deposit requirements; and
  5. Confirming you intend to occupy the property, (as opposed to renting it out).

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.

It is also worth remembering 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.

Applications for the First Home Loan Deposit Scheme opened on the first of January 2020, and will be limited to the first 10,000 successful applicants. First home buyers who wish to apply for a guarantee under the scheme will be required to do so through participating lenders and their brokers.

If you’d like to know more, you can go straight to the First Home Loan Deposit Scheme website.

Of course, if you need any kind of real estate advice or assistance, such as help in finding the right property at the right price, then don’t hesitate to call on our experience at Barry Plant Moonee Valley on 9373 0000.

Regards,

Bill Karp

Director – Barry Plant Real Estate

Essendon & Keilor East